In 2003, TSMC, which was in the midst of a fierce battle with UMC in the 0.13 micron process, made a decision to invest in Creative Electronics (GUC), an IC design service company that had just completed five years, and became the single largest shareholder of the latter. In the nearly two decades since then, GUC has gradually become the quickest way for design factories to invest in TSMC, and ushered in rapid development under the east wind of the design industry.
The success of GUC is a microcosm of the era of semiconductor division of labor. The birth of TSMC has divided the design and manufacturing two major links, encouraged more start-ups to enter the industry, but also brought problems - a chip from design to foundry tape-out, lack of a professional team as a bridge to assist inexperienced design companies to reduce tape-out costs and accelerate product launch.
In fact, UMC, which was still on a par with TSMC in process technology, was keenly aware of the necessity of this link as early as 1993, and in 1995, before formally transforming into a pure wafer foundry, it spun off its IP and NRE divisions to establish Zhiyuan Technology, which has also become one of the most important and fastest paths for design factories to invest in UMC.
With the transfer of the semiconductor industry chain to the Chinese mainland, and the increasingly tense geopolitical factors driving the localization of the supply chain from IC design to manufacturing, this link that has been valued by foundry giants has gradually become the core help of independent substitution and has attracted attention.
In this context, a group of Chinese mainland IC design service companies are rising, they come from the head design factory, foundry, with rich design, tape-out experience, has become an important force to promote the development of local IC design, Yuanxin Semiconductor is one of them.
Founder of Yuanxin Semiconductor Zeng Yanfei
ZTE event becomes an opportunity for entrepreneurship Advanced technology advantages highlight the olive branch of SMIC
In 2018, a turning point in the Chinese mainland semiconductor industry, ZTE, which was in the critical stage of GF's 5G communication chip tape-out, was sanctioned by the US Department of Commerce, and finally paid up to $1.4 billion in compensation to avoid the miscarriage of the product. Zeng Yanfei, the founder of Yuanxin Semiconductor and also the leader of GF's project that year, still remembers this.
Zeng Yanfei, who graduated from the School of Computer Science of the National University of Defense Technology with a master's degree in microelectronics, worked in international manufacturers such as ALCHIP and AMD before GF, serving as a chip design engineer, project manager, technical Leader, and has more than 30 chip tape-out experience. The in-depth understanding of the back-end design made Zeng Yanfei realize in the ZTE incident that the trend of domestic substitution is general.
From 2018 to 2019, Zeng Yanfei, together with ALICP and Huawei HiSilicon senior ASIC designers, established Yuanxin Semiconductor to provide customization and tape-out services for large-scale high-end chips with advanced processes from RTL to GDSII, including IP selection, DFT, verification, physical implementation, analog layout design, etc., and have cooperative relations with major foundries and packaging and testing factories at home and abroad, providing NRE design, tape-out, packaging and testing and other services in one stop.
With the team's profound technical accumulation and industry reputation, Yuanxin quickly received the first order, that is, a 16nm process AI chip, and completed the NRE design of MPW within 3 months, the tape-out was successfully lit after 4 months (that is, the one-time tape-out film was successful), and then in February and July 2020, it successively lit up the 12nm and 7nm process AI chips, and 14 months indirectly lit up three advanced process chips, so that the yuanxin quickly attracted the attention of the industry.
The advanced technology represented by AI chips is the core competitiveness of Yuanxin that distinguishes it from other manufacturers on the same track, especially in Chinese mainland, and has less experience in advanced process tape-outs, while Yuanxin's core technical team members are from AMD, ALCHIP, Huawei HiSilicon, GF and other international manufacturers, and have held important positions in important projects, making Yuanxin establish a moat in advanced process design services.
This successfully attracted SMIC, which Chinese mainland went the farthest in advanced technology. In October 2020, yuanxin, which was only 17 months old, received an olive branch from SMIC, and the two sides decided to jointly cooperate in advanced technology. According to Zeng Yanfei, in the two months after the contact, SMIC opened an account for the company to start cooperation, and the number of companies with which it has such a cooperative relationship is currently no more than 10.
Zeng Yanfei said that the cooperation with SMIC is actually mutually beneficial and win-win. On the one hand, based on the cooperative relationship between the two sides, the design factory that chooses Yuanxin for design services will get a better schedule in SMIC, and more customers will flow to SMIC through Yuanxin; on the other hand, the design factory that chooses SMIC to do tapelets is also more likely to choose Yuanxin for design services.
Nevertheless, as a new entrant to the IC design service track, Yuanxin has faced many challengers. In addition to the GUC, ALCHIP already mentioned above, as well as the United States Broadcom, the competitive landscape of Chinese mainland is relatively scattered, and it will still show a mixed situation in the short term, and there are currently Brite and companies that expand the IC design service business horizontally by other links.
Zeng Yanfei believes that compared with these companies, the company mainly has several major advantages: First, compared with GUC, Brite and other professional design service companies that are closely related to the foundry, Yuanxin is more free when choosing a tape-out foundry for the design company, and can cooperate with TSMC, TSMC, etc., as well as international cooperation with SMIC; second, compared with competitors across the line, the company has accumulated more advanced technology and reputation in advanced technology.
It is also under these advantages that the company's revenue has been able to maintain more than 50% growth every year since its establishment, and the revenue in 2021 has quadrupled on the basis of 2020. Zeng Yanfei frankly said that under the trend of global lack of core and supply chain localization, Chinese mainland in recent years, there have been many streaming projects, and in the case of talent shortage, the company does not even need the marketing department to find business, "It is not that we go to find customers, but customers come to us." ”
Yuanxin Semiconductor "Honor Cabinet"
IC design service stations on the cusp of the "black swan", new trends in technology to bring increments
"Being chased by projects and customers" is a portrayal of the IC design service industry station. According to the market research agency IBS forecast, by 2030, the global semiconductor market size will grow from 439.8 billion US dollars in 2020 to 1,130.4 billion US dollars, and the proportion of the Chinese mainland market will expand from 53.67% in 2020 to 0.01% in 2030.
According to the latest data released by ICCAD a few days ago, in 2021, China's IC design industry sales are expected to reach 458.69 billion yuan, an increase of 20.1% over 2020, from the perspective of enterprise scale, the number of enterprises with more than 1,000 people is 32, an increase of only 3 compared with last year, in contrast, the number of small and micro enterprises with less than 100 people reached 2351, an increase of 489 over the previous year.
The rise of small and micro enterprises is an important growth engine for the IC design service industry. According to estimates, the cost of back-end design services currently accounts for about 40% of the cost of research and development. As far as Chinese mainland is concerned, a large number of startups have emerged, high-end projects are everywhere, but they suffer from lack of experience and financial support. "Many design companies only produce one product a year, and the team only has architectural engineers, so they can't afford a back-end design team."
At the same time, as the semiconductor industry continues to advance to advanced processes, the cost of chip tape-outs is repeatedly stacked. According to reports, a 12/14nm chip, tapeout costs nearly $4 million, while the 7/8nm process is nearly $10 million, at the same time, with the global foundry shortage of goods to increase prices, tapeout costs further increased, the choice of reliable design service providers to improve the success rate of tapeouts has become a top priority.
From an industry competitive perspective, a higher success rate of tape-out means that design plants can iterate products faster. In the current industry background of endless applications and shortened product iteration cycles, this will bring greater advantages to the design factory in the competition, on the contrary, if the design service company selected by the design factory has insufficient experience and technical reserves, it will lose not only capital but also time cost.
On the other hand, from the perspective of business model, IC design services are also a long-term business. According to Zeng Yanfei, customers often after the successful tape-out of the first generation of products, in order to maintain the consistency of technology, the second-generation, third-generation products of the tape-out and design service provider selection will also tend to be the same, in addition, after the success of a chip tape-out, the design factory will pay the corresponding design service provider every time it places an order to the foundry.
Under the trend of the industry, the two major "black swans" of the epidemic and the lack of cores have unexpectedly brought variables to the IC design service industry. From a demand perspective, the epidemic has increased the demand for home office, online education, etc., and the rising demand for consumer chips and data center chips has brought more business to design service companies, on the other hand, because design services can be fully implemented online, so there is almost no impact on project schedule and delivery.
From the perspective of lack of cores, the impact is relatively small for design service companies such as Yuanxin, which are mainly based on advanced technology. Since the current lack of core mainly occurs in mature processes, and in the Chinese mainland itself, the production capacity demand for advanced process mass production is not as large as that of mature technology, and Yuanxin has a good cooperative relationship with large factories such as SMIC, and also has certain advantages in the tapeout scheduling.
In addition to industry characteristics and unexpected events, technology trends in the design industry are also bringing new increments to the design services industry, with the rise of Chiplet and RISC-V architectures being the most watched. For the former, Zeng Yanfei believes that it is still necessary to wait for technological breakthroughs and opportunities for the market to truly mature, while for the latter, it said that it will be an important way to catch up with overseas Chinese mainland in the future.
Zeng Yanfei believes that compared with 10 years ago, the performance improvement of processors in recent years is actually not high, from the process point of view, silicon chips have almost reached the limit, and the third generation of new materials semiconductors are still in trial mass production, unable to achieve real mass production. When the chip process reaches its limits, it means that the next step can only be improved from the architecture.
Some people predict that in the next 5 years or so, the performance improvement of the top processor will stagnate, and this is the best opportunity for domestic chips to catch up. Zeng Yanfei said, "We can take the lead in in-depth research on new architectures, such as RISC-V, and we can also take the lead in entering the next stage, such as carbon-based chips, so it is not impossible to overtake in future corners." ”
To use the RISC-V MCU to cut into the IC design track to promote domestic substitution, the original intention remains unchanged
Since 2020, the semiconductor industry has set off a wave of mergers and acquisitions, and at the same time, in the absence of cores and geopolitical tensions, supply chain security is becoming a heavy consideration for companies in all aspects of the industrial chain, and many large manufacturers have begun to integrate into the upstream and downstream of the industrial chain. Zeng Yanfei believes that at present, in the next few years, the trend of industrial chain integration will be greater than the trend of division of labor. Perhaps based on this judgment, Yuanxin is also expanding its business upstream.
According to Zeng Yanfei, Yuanxin plans to transform from IC design services to a business model that coexists with IC design and design services, and has begun product research and development, with the goal of launching the first consumer-oriented MCU based on RISC-V architecture in 2023 or later. It admits that this type of product development cycle is short, requires small capital investment, and is more suitable for smaller start-ups as "stepping stones" for the industry.
For Yuanxin, the profound technical accumulation can help it develop products with better comprehensive performance and higher cost performance on the basis of horizontal comparison of similar products, and the innate advantage of tape-out experience can not only make Yuanxin eliminate the cost investment in the later design process, but also based on its cooperative relationship with the foundry, its products will also have certain advantages in the tape-out cycle.
In addition, it is also based on the advantages of the design service business, compared with other start-up IC design companies, Yuanxin has a natural source of funds. According to Zeng Yanfei, Yuanxin has not yet carried out financing since its establishment, not without investors to negotiate, but because the company is not short of funds for the time being, it is abandoned, although after cutting into the IC design track, financing is inevitable, but the design service business will also play an escort role.
On the other hand, the extension of ic design business will in turn drive the increase of design service business. For example, Zeng Yanfei explained that if a design service company itself has experience in the design of RISC-V chips, then for design factories, choosing such a design service company will be more assured, improving the success rate of tape-outs, and being able to learn from the latter's technology while cooperating to achieve a win-win situation.
In Zeng Yanfei's planning, it is difficult to say which IC design and design service business will occupy a larger proportion in the future, and there will be many variables in the future with the development of business, the acceleration of the financing process and the change of business model. However, in essence, Yuanxin will always maintain the original intention of "co-creating Yuanxin, bravely creating Chinese core", and contribute its own strength to the localization of Chinese semiconductors.
Under this vision, Zeng Yanfei's planning for the company is also all-round, and he also has unique thinking about the problems facing the industry at present. For example, in the current shortage of talents in the industry, Zeng Yanfei said that unlike some large factories that grab high-end talents, Yuanxin is willing to throw an olive branch to talents with various academic backgrounds, and also pays more attention to the company's own ability to cultivate talents.
On the issue of lack of cores, Zeng Yanfei believes that the global chip crisis is difficult to alleviate in a short period of time, although some areas have eased, but there is still a serious shortage in the industrial and automotive fields, which is also an opportunity for localization. In terms of Yuanxin, it has maintained a good cooperative relationship with upstream and downstream semiconductor enterprises at home and abroad, which can ensure the stability of production capacity to the greatest extent.
In addition, in order to obtain a better development environment, Yuanxin moved from the original registered place to Zhangjiang, and as a member of the 895 Entrepreneurship Camp, Zeng Yanfei admitted that the environment of Zhangjiang Hi-Tech and the platform of the 895 Creation Camp have brought great help to the company's start-ups, in the past year, Yuanxin has participated in the activities organized by the platform many times, and recently won the 2021 895 Entrepreneurship Camp "Core Power Trophy".
Zeng Yanfei said that through the Shanghai Stock Exchange activities organized by the platform, the company deeply studied the basic requirements and processes of listing, and also participated in the 8th Xiangshang Innovation and Entrepreneurship Competition in 2021, and won the first prize. Under the good entrepreneurial atmosphere, there are many benefits.