From: Moore core smell
The ZTE incident has opened up the embarrassing situation of China's "coreless" and once triggered the reflection of the venture capital circle: Why does China's VC rarely invest in chips?
In fact, there are not a few VC organizations in the domestic layout chip field, but this industry that is not so "sexy" did not attract too much attention before the ZTE incident.
Talking about the indifference of China's VC to the chip, the industry seems to blame part of the reason for the low return - "We have invested in a project. At the highest price, the chip produced was 294 yuan, and it has been falling to 24 yuan, then fell to 12 yuan, now more than 1 dollar, the profit can be imagined." At a salon sponsored by the investment community not long ago, Zhu Qing, the founding partner of Guangliang Capital, felt so much.
30 years of history: Semiconductors ushered in a new golden opportunity for localization?
Looking back, the 1980s and 2000s were undoubtedly the golden age of global investment in semiconductors.
Walden International has done a statistic, when half of Silicon Valley’s investment was in the semiconductor field. At the time, although R&D expenses grew rapidly, sales grew faster, so the return on investment was very good. The older generation of Silicon Valley top fund partners are basically all from semiconductors, but they have been less and less since 2000.
First, the domestic semiconductor industry started much later. Hua Deng International Partner Zhang Wei said that Walden International has actually invested in semiconductors in China since 2008. At that time, it was at the financial crisis, and a large number of returnees returned to China, and a large number of investment opportunities emerged.
Tang Zujia, a partner of Xichuang Capital Management, reviewed the growth of China's semiconductor industry's output value in recent years and found that 2016 is an iconic node. This year, the mainland IC design output value exceeded the beta test for the first time, and for the first time exceeded Taiwan. If we look at the localization target of 2025 as the standard, from 2017-2020, there will be almost 50 billion growth space every year.
Even so, the domestic semiconductor industry is still very different from the international level. Chen Zhenyu, the founder of Nuorixin CTO, bluntly said that the gap between domestic and international advanced levels is large, and the self-sufficiency rate and market share are relatively low, especially on RF chips. Some chip design levels are basically synchronized with foreign countries, but the products are relatively single.
Fang Hao, director of investment in the world, said that after the ZTE incident has slowly subsided, friends in the IC industry should still be more clear, the world is still the world, the market is still this market, "In fact, the gap between us and the United States is still Very large, we are still anxious, there is not much capital to be proud of."
With the outbreak of the ZTE incident in 2018, semiconductors seem to usher in a new prime time for localization. Tang Zujia, a partner of Xichuang Capital Management, predicts that it will maintain a compound growth rate of over 26% in the future. "I just said that semiconductors have bubbles. I think semiconductor foams are not enough. This bubble needs to be more aggressive. Because an industry needs more development, more attention needs to be paid, more funds are entered, and greater wealth effects. In order to attract more senior talents to return and enter, the industry is likely to develop."
Status: There are three battlefields in the semiconductor industry
The semiconductor industry is undoubtedly an attractive "cake." One data shows that 100 million US dollars supports the output value of the integrated circuit industry of about 150 billion, so the integrated circuit is basically an accelerator of the industry.
So the question is, what is the current status of the domestic VC layout semiconductor industry?
Hua Deng International Partner Zhang Wei bluntly said that the semiconductor industry has three battlefields, the largest one in the middle, storage, CPU, basically we think this kind of heavy investment, especially storage, is suitable for national big funds or local governments to do, storage to If you want to catch up with the overseas level, you are ready to fall behind the 2-3 generations. Each generation will prepare RMB 30-500 billion, and accurately enter RMB 1000-150 billion. There may be opportunities to improve. Storage of this battlefield is very cruel, one generation behind is also unable to sell, "If you have no special factors, I suggest you avoid this main battlefield, this is a battle between the countries."
Liu Wei, director of investment and investment at Chuangdong, said that in the industry chain, chips are generally the most upstream of the entire industry chain, including software and machine systems. The chain is very long, and the chain length represents a relatively slow update cycle. Second, the difficulty of updating bigger. The two difficulties represent the development trend of the entire industry and the difficulty of development is much worse than others.
Characteristics of the semiconductor industry: large investment, high barriers and internationalization. Liu Wei, director of investment and investment in the East, said that the IC company is a global competition, and it is facing the pattern of global competition. Although talents, teams, markets, and management are all keeping up, the middle nodes are actually The control difficulty is still relatively large.
“Before talking to a team that is doing IC, the daily work of engineers is 10-12 hours, and the pressure is very high. The big ones are Evergrande and the winners are all eaten. This industry is the first to eat meat and the second to drink soup.” Liu Wei said that the chip industry is a technology- and capital-intensive industry. Don't be too optimistic about investors. Don't exaggerate the opportunities in the industry.
Opportunity: Where is the next gold mine?
Tang Zujia, a partner of Xichuang Capital Management, believes that from the perspective of industrial chain, the mobile phone industry has become the largest semiconductor carrying platform. The automotive industry has become a new engine to promote the development of the semiconductor industry, and the Internet of Things is undoubtedly a new force that cannot be ignored.
Specifically, the total amount of mobile phone shipments has been very stable. In the future, the proportion of chips in mobile phones will not increase significantly, but the localization ratio will increase significantly. Domestic alternative investment opportunities cannot be ignored. The automobile industry, although currently small in scale, is currently the industry with the highest compound growth rate.
Tang Zujia said that China's automobile industry chain is relatively closed and it is very difficult to enter. Moreover, the safety requirements of the automotive industry are very high. An electronic component has been verified, imported, shaped, and sold from the previous stage. It often takes four or five years to pass, and finally the car is not selling well, and there is no return at all. Now, the electronic process of traditional parts in the car has come to an end, but the new trend of intelligence, networking, and electrification has come. The original pattern of the car has been broken, and new entrepreneurial opportunities abound.
For the prospects of the automotive industry, Fang Hao, the director of investment in the world, is also very optimistic. “The past 10 years have been the 10 years of mobile Internet and smart phones. The next 10 years may be smart cars, even 10 years of car network outbreaks. It is a big market with a trillion size of 10 years or even 20 years."
In addition, 5G is also the next opportunity for the semiconductor industry. Newborn core founder CTO Chen Zhenduo said that at the end of 2018, the 5G industry chain was pre-commercialized. In 2019, 5G commercial construction was started. In 2020, 5G was officially launched, which is basically the procurement of international chips. "After the ZTE incident, if the chip can not be controlled independently, there will be huge risks."
Dan Xu Capital Partner Liu Xu, some chip companies are quite difficult to enter Huawei or OPPO, VIVO supply chain, and now more and more domestic companies are willing to try, in the final stage may have a long way to go, but This opportunity has appeared. "The ZTE incident is actually a good thing for the Chinese chip industry chain."
In addition, the state has invested in a large number of integrated circuit factories, for example, in Hefei, Xiamen, Chengdu, Nanjing, after a large number of integrated circuit factories have been built, it is a good opportunity for many IC companies, because the capacity of these plants is one or two years. To release later, the dividend period of domestic chips should provide a very good opportunity for domestic chip companies.
In this regard, Zhu Qing, the founding partner of Lightweight Capital, believes that imported alternative companies may usher in the spring. "Here, it is a green matter to call for the opening of the chip industry. This is a matter of pooling efforts. For venture capital institutions, if there is a good exit channel, they are more willing to increase investment."
Don't enter the market without preparing for the "long-term war" of 8-10 years.
The chip is a big investment opportunity for the industry. However, it is not difficult to see that the investment in this industry is very difficult, and the investment income is not as high as imagined. Even the investors have satirized the chip in China. The profit is not as good as "buy soap."
As a veteran of the semiconductor industry in the 20th and 30th years, Walden International Partner Zhang Wei said that the semiconductor industry investment has a cycle, after about 30-5 years in about 30-5 years. “There are some of the more popular ones in each cycle. Some of them are better not to touch them because they know that they can’t be done. For example, silicon light, the industry is now hot again. In fact, silicon light products are hot every seven or eight years. The previous three waves almost all "street"."
Dan Xu Capital Partner Liu Xu said frankly that the chip is indeed a very bitter industry, but it is not compared with "selling soap." "It's unreasonable to use 'selling soap'. The chip is very tall. If you don't have a chip, it's hard to grasp the pulse of the market. Once the amount is up, this return on investment. The rate is far from being as good as selling soap."
Tang Zujia, a partner of Xichuang Capital Management, also said that chip investment is relatively long in the early stage, the technology has been verified for a long time, and the process production rate has reached a stable target. It takes a long time, and the customer import time is often longer, so it is more difficult. Get high growth and valuation premiums. However, the same, the chip company will often enter a rapid growth state once the amount starts, the cash flow will soon turn better.
Talking about how the "domestic core" went out of the way, Hu Linping, the founding partner of Zhengxuan Investment, shared the experience of Japan and South Korea.
"Japan's semiconductors are all learned from the United States, and South Korea's semiconductors are all Japanese. There is a joke that the Tokyo-based aircraft on the weekends are all engineers in the semiconductor industry, from Japan to South Korea to earn foreign blocks, South Korea. Samsung and Hyundai hired engineers from Japan's mature semiconductor chips to go to the factory to guide their work, and to treat them well. Hu Linping believes that this is also a good way to learn from China.