The wind is blowing, and the only way to move forward is to work hard.
Author | Xiao Ying
"If you hadn't started a business, what would you have wanted to do?"
"Scientific research, may be in the field of semiconductor research and development, anyway will not leave the core technology."
In early 2019, Wang Chuanfu replied in an interview with Lu Min, then chairman of Autohome, at BYD's headquarters.
Less than two months before this interview, BYD had just released its landmark product, IGBT 4.0. At that time, for the automobile circle with less attention to semiconductors, it just felt very cattle, but it was not quite known to what extent the cattle were.
Until the end of 2020, the north and south Volkswagen was exposed to stop production due to lack of cores, and the chip became a tribulation faced by the entire automotive industry chain, and everyone began to realize the importance of chips to automobiles.
In August 2021, Xu Daquan, vice president of Bosch China, joked in the circle of friends that under the heavy pressure of "lack of core", he even wanted to "jump off the building" with the leader.
Chen Yudong, president of Bosch China, who was cue to the leader, replied directly below, "Jump, otherwise there will be no chance to jump in September."
Subsequently, at an open forum, Zhu Yanfeng, chairman of Dongfeng Group, continued to ridicule that all the CEOs of car companies were squatting at Bosch's Shanghai headquarters, some pushing, some picking up.
In the joke, it tells the serious dilemma of the lack of core in the automobile industry.
Entering 2022, the general prediction of the industry is that the shortage of automotive chips will continue: there are still uncertainties in the epidemic situation everywhere, new and expanded production capacity has not yet been released, inventory consumption continues to lack cores, and the vicious circle of more and more hoarding and more and more shortages is accumulated...
Lack of core is a common dilemma faced by the global automobile industry, and for the Chinese industry with shortcomings in chip manufacturing, it is a dilemma.
But everything has two sides of the same body, the lack of core breaks the situation of solidification of the automobile industry chain, bringing opportunities to domestic automobile chips, with automotive chips as a breakthrough, domestic chips ushered in a historic opportunity.
01
The run-in period of domestic automotive chips
On January 27, BYD Semiconductor successfully passed the meeting on the Science and Technology Innovation Board of the Shenzhen Stock Exchange and is expected to become the first stock of automotive chips.
BYD's layout of IGBT is almost synchronized with new energy vehicles. In 2003, BYD acquired Qinchuan Automobile and officially entered the manufacture of new energy vehicles, and in the same year, BYD established the Automotive Semiconductor Division.
In 2004, BYD Semiconductor Division was officially registered under the name of BYD Microelectronics and officially laid out the IGBT industry. In April 2020, the company officially changed its name to BYD Semiconductor Co., Ltd. and began its independent listing journey.
Chip manufacturers mainly have three business models: one is only responsible for chip design and sales, such companies are called Fabless; one is only responsible for chip manufacturing, which is called Foundry; and there is also a type of chip manufacturers that can both design and produce themselves, that is, IDM, due to the chip industry capital intensity, technology intensity is very high, IDM enterprises are very few.
BYD Semiconductor can be seen as an IDM company. At first, it only had chip design capabilities, in order to obtain chip manufacturing capabilities and further conquer the core technology of IGBT, in 2008, BYD acquired a chip manufacturer Ningbo Zhongwei.
Founded in 2002, Ningbo Zhongwei mainly produces 6-inch chips, which was once called "the hope project of Zhejiang semiconductor industry".
At the beginning of the establishment of this enterprise, Zhejiang injected 3 billion yuan into it. Due to the aging of equipment, the production capacity can not keep up, and the liquidity is insufficient, in 6 years, Ningbo Zhongwei has gone from being born with a halo to the brink of bankruptcy. By the end of 2007, its deficit had reached more than 70 million yuan.
In the eyes of the outside world, BYD spent 170 million yuan. Due to the acquisition of this company, BYD's stock price fell sharply that day.
Wang Chuanfu's vision paid off. As of 2020, BYD's IGBT-based automotive specification-level power devices have accumulated more than 1 million vehicles, which has been able to achieve a large proportion of self-sufficiency, while most car companies have to purchase from Infineon and ON Semiconductor.
BYD Semiconductor IGBT5.0 chip
In the past two years, when a group of car executives are looking around for chips, some car companies have begun to envy BYD. Judging from the information released by BYD, it seems that there is no particularly serious problem with the lack of cores, and there are even some rumors that the owner of the main engine factory personally asked Wang Chuanfu for chips.
There are many kinds of car chips involved, and IT is impossible for BYD to be completely self-sufficient. BYD is a little better than other car companies, mainly because it has a deeper layout of the industrial chain, stronger control, and better ability to predict and respond to risks.
But in any case, BYD IGBT on the car, for the car chip localization alternative to a corner, especially in the automotive industry generally lack of core in the context.
Automotive chips are mainly divided into three categories: functional chips, power semiconductors and sensors.
IGBTs are power semiconductors, the supply situation has been in a tight state, and what is missing more than IGBT is a wide variety of functional chips. According to the feedback of car companies, all kinds of functional chips are generally lacking, and the types of missing at each stage are different.
For example, what caused Bosch executives to want to "jump off the building" was the lack of ESP chips.
Bosch ESP's chip supply comes from STMicroelectronics, and other ESP system Tier1 suppliers such as Continental and Wandu are also equipped with ST chips.
The chip is all supplied by a Malaysian factory, so there is no possibility of replacement after the problem arises.
At the same time, the ESP system supply of all car companies relies on these Tier 1s, which has caused a devastating blow to the production capacity of car companies.
The problem that can be seen here is that from the depot, Tier1, chip companies, the higher the concentration of supply upstream.
Before the lack of core problems broke out, car companies would hardly have direct business relations with chip manufacturers. Car companies used to be accustomed to the packaging solution provided by Tier 1, and did not need to worry about the upstream situation.
Due to the long-term dependence on multinational parts giants for the core components of the mainland automotive industry and the long-term stability of upstream suppliers, it is difficult for domestic automotive chips to enter the automotive supply chain.
Chen Qingtai, chairman of the China Electric Vehicle 100 Association, believes that this wave of core shortage is the best opportunity to break the solidification of the supply chain.
He said that the biggest problem encountered by the catch-up industry in the development process is that the market export cannot be found after the products are developed, because the original industrial chain has been solidified, and no automobile company is willing to take the risk of giving up the very mature products used.
Without this crisis, after the production of China's own chips, it will be very, very difficult to enter the solidified market, but this crisis has brought opportunities.
An automotive industry analyst also said that car companies have begun to have the willingness to contact, evaluate, test, and even use domestic chips to a certain extent. Even if we do not immediately make alternatives, we will develop alternative resources such as second supply and third supply.
In addition to dealing with uncertainties, in the long run, the greater significance of achieving partial localization substitution lies in ensuring supply chain security and balancing supplier costs.
But there are also conservative views. An engineer who has been engaged in chip design for a long time said that the requirements of vehicle-grade and industrial-grade chips for product reliability, consistency, external environment compatibility and other aspects are more stringent than consumer-grade chips, which is a challenge for domestic chip substitution.
No car company is willing to bear the safety risks and recall risks brought by a chip. He believes that most car companies are still in the inspection stage.
En Yunfei, chief engineer of the Fifth Research Institute of Electronics of the Ministry of Industry and Information Technology, also believes that the main reason for the monopoly of mainland chips by foreign companies lies in the quality and reliability of domestic chips.
Vehicle-grade chips have a complete set of certification system, only through all certification, vehicle-grade chips can be commercialized.
At present, the domestic chip environment has more serious quality problems, and even some chips are listed without verification, which has huge hidden dangers in application scenarios.
In particular, the unqualified detection of the vehicle specification chip will directly lead to the unqualified detection of automotive products. Therefore, in terms of chip quality and reliability, the mainland needs to further improve.
Therefore, at present, it is the key run-in period for domestic chips to enter the automotive industry chain.
How much does a car cost in chip procurement?
According to different models, the chip cost accounts for about 10%-30%, which can be said to be the second cost item after the power battery. A trend is that car companies have begun to grasp these components that are related to user experience and cost, more in their hands.
Just as BYD has grabbed the battery and the chip in its hands at the same time, Tesla's action is similar.
As early as 2015, Tesla announced its own chip, but his chip is completely different from BYD's IGBT, Tesla's self-developed is a large-power SoC chip for automatic driving.
The market for smart cockpits and autonomous driving smart chips is waging another war.
02
The smart chip pattern has not yet been solidified
On September 9, 2016, in order to answer a question, Yu Kai deliberately registered Zhihu with his real name.
"How do you evaluate the horizon robotics founded by Yu Kai?"
Underneath this Q&A, someone criticized him for being a "big fool" and made a doomsday prediction for horizons.
Five years later, Horizon not only did not die, but rode on the east wind of AI chips and became a hot new star in the automotive circle.
Yu Kai, who came from an artificial intelligence background, joined Baidu in 2012 and established the Baidu Deep Learning Research Institute (IDL).
Before joining Baidu, Yu Kai was a proper academic school, and according to official information, he had been invited to teach artificial intelligence-related courses at the University of California, Stanford University, Tsinghua University and other domestic and foreign universities.
When he joined Baidu, Yu Kai should be very satisfied, and he even persuaded his long-time friend Andrew Ng to join as the chief scientist of Baidu. As the father of the Google Brain project, Ng joined Baidu and once caused a sensation in the global technology industry.
But obviously, Yu Kai is a person who is not willing to silently shine in the black hole of technology.
After working at Baidu for 3 years, Yu Kai decided to quit his job and start a business. In July 2015, Horizon was established, positioning AI chip start-ups, committed to the research and development of edge artificial intelligence chips and solutions.
Yu Kai's ambitions have always been great, and his original intention in establishing Horizon is to make all the devices in the world have the intelligence from perception, interaction, understanding to decision-making.
Based on this strategy, Horizon released two sets of products, one for the "Hans Christian Andersen" system for smart homes and one for the "Hugo" system for smart driving.
Later, these two product lines named after literary giants gradually disappeared into the communication copy of Horizon. In its place are "Journey" and "Rising Sun", two product languages that are more unified with horizon style.
In December 2017, at the China World Hotel, Horizon officially demonstrated the first generation of AI chips based on self-developed - "Journey" for intelligent driving and "Rising Sun" for AIoT.
In 2019, Horizon released Journey 2 and Rising Sun 2; in 2020, Journey 3 and Rising Sun 3 were launched, and Journey 2's cumulative shipments exceeded 160,000 pieces.
In February 2021, Horizon completed a Series C financing with a financing amount of $900 million, becoming a unicorn enterprise in the field of AI chips, and in May 2021, Horizon released Journey 5. At the same time, Zhengcheng Chip has successfully matched more than 10 car companies with a variety of models.
Horizon Journey 5
After six years of deployment, Horizon's influence in the domestic automotive industry has initially been laid. But horizons are stepping into a very interesting and unusually fierce arena, and standing opposite it are the chip giants of the consumer electronics era, and the competition has just begun.
The track of intelligent driving has long been controlled by two chip suppliers, Mobileye and Xilinx.
Barbarians are constantly pouring in. In 2015, the year Horizon was just founded, NVIDIA launched the Drive PX self-driving platform, officially announcing its entry into the automotive track.
In January 2016, Nvidia released its self-driving platform, the Drive PX2, and Tesla was one of the first customers of the Drive PX2.
In early 2017, NVIDIA released the Xavier chip, a Strict sense of SoC, with a hash rate of 30 TOPS and a power consumption of only 30W. The Xiaopeng P7, the model with the strongest domestic intelligent driving ability, is equipped with this chip.
Two years after the release of Xavier, NVIDIA hit another king blast that shocked the entire auto industry. In November 2019, Nvidia released the Orin X chip, which hash rate of 254TOPS, and this chip is scheduled to be put into production this year.
Nvidia Orin chip
Almost all the main models of the new car-making forces this year are equipped with this chip, including Weilai ET7, Weilai ET5, Ideal X01, Xiaopeng G7, WM L7, R Car ES33, Zhiji L7 and many other models.
And that's not all. In April 2021, Nvidia launched the atomic bomb again, releasing the latest generation of autopilot chip Atlan, with a computing power of 1000 TOPS, and will be used in the 2025 models of several automakers.
Round after round, NVIDIA has continuously launched a bombardment with the computing power level of several generations of products ahead of other competitors in the industry.
Another strong player that cannot be ignored is the chip giant Intel. Although Intel has been a bit twilight in recent years, and has encountered fierce sniping by AMD and Nvidia in the CPU and GPU markets, the moat of the giant is still very deep, and the war of several companies is burning from the consumer electronics end to the automotive market.
For the automotive market, Intel did not start early as Nvidia, but the way to enter the game was very clever. In April 2017, Intel acquired Mobileye for a total value of $15.3 billion, and immediately stepped into the automotive market.
Founded in 1999, Mobileye released its first self-driving chip, EyeQ1, in 2007, which was quickly used by BMW, GM and Volvo in production models.
Since then, Mobileye shipments have risen, and by the end of 2021, the shipment of EyeQ system integration chips has exceeded 100 million pieces.
However, in recent years, with the evolution of automotive electrical and electronic architecture to centralized, and the pursuit of large computing power by autonomous driving, Mobileye is encountering unprecedented pressure.
Compared with the performance king Nvidia, Mobileye has made a lackluster progress, and has been robbed of a large number of orders by multiple parties, and there have been many singing and declining arguments in the industry.
On January 4 this year, Mobileye announced at CES that it has launched its most advanced and powerful self-driving system integration chip to date, The EyeQ Ultra.
Mobileye introduced that this chip is based on the seventh-generation EyeQ chip technology architecture, with a computing power of 176TOPS, which is expected to be supplied at the end of 2023 and fully realize vehicle-grade mass production in 2025.
This product release is seen as Mobileye's fight back, as to whether car companies will pay the bill, we must continue to go on to see.
AMD reports to the automotive market in a similar way to Intel. In October 2020, AMD announced a $35 billion acquisition of Xilinx, standing directly opposite Intel.
Mobile chip supplier Qualcomm is also coming. In terms of smart cockpits, Qualcomm Snapdragon digital cockpit platform has become synonymous with smart cockpits.
In January 2021, Qualcomm launched the 4th generation of Qualcomm Snapdragon Auto digital cockpit platform, using the world's first 5nm car chip, further strengthening its leading position in the smart cockpit market.
At the same time, Qualcomm also decided to participate in the competition for autopilot chips. In January 2020, Qualcomm announced the launch of the Snapdragon Ride autonomous driving platform, with a maximum computing power of 700 TOPS, and the customers it has won so far include BMW, Great Wall and other car companies.
Looking at the overall situation, NVIDIA's intelligent driving chip and Qualcomm's intelligent cockpit chip are forming a crushing offensive against the entire industry.
But overall, AI chips have not yet formed an industrial pattern monopolized or solidified by international giants, which reserves certain opportunities for localization players.
In the domestic market, the biggest opponent facing Horizon is Huawei, in addition to "not building a car", Huawei has mastered a full set of core technologies for intelligent cockpit and automatic driving.
In the direction of automotive chips, Huawei released AI chips Ascend 310 and Kunpeng 920 for intelligent driving platforms, and 5G communication chips Balong 5000 applied to smart cockpit level.
In addition to Huawei, domestic enterprises for intelligent driving and intelligent cockpits, as well as a series of innovative companies such as Black Sesame, Xinchi Technology, and Xingge Technology.
The question now is, in this market, how do local players win against such powerful opponents?
In the past, domestic chip suppliers always liked to say that their main advantage was open technology and flexible response, but giants are also changing. For example, the most common complaint of car companies about Mobileye is that black box delivery cannot meet the needs of intelligent driving full-stack self-development. Not long ago, Mobileye also said that it will be more open in the future.
If the giants are pulling together in terms of services, what is the real competitive advantage of domestic enterprises?
At present, car companies mainly refer to five dimensions when choosing chip suppliers: safety, computing power, efficiency, cost, and service.
First of all, safety is not difficult to understand, and car companies cannot afford any traffic accident risks and recall costs. Secondly, the computing power is considered to be one of the key indicators to judge whether the chip is powerful, but it is only a crude indicator, how much computing power is not equal to how much computing power can be used, but also depends on the software and algorithm capabilities, which involves the dimension of efficiency.
In addition, auto parts procurement has a high degree of sensitivity to cost, and as technology and products become more and more mature, cost will play an increasingly important role in competition. Finally, the service we are talking about, whether it can respond to demand and whether it can be delivered in a white box, may be a factor for car companies to consider.
In short, the more fierce the competition, the harder it is for customers to satisfy. At present, domestic chip suppliers do not have any absolute advantage, fortunately, the game has just begun, there is still a chance to fight.
03
The breakthrough road of domestic chips
Like the automotive industry, chips also pin their dreams on China's technology powerhouse.
The pursuit of this dream can be traced back to the 1950s, when the semiconductor industry experienced decades of upheaval and displacement, experiencing lies, scams, and struggles.
Today, the mainland semiconductor industry is no longer a desert, and even in some fields has achieved good results.
The birth of a chip needs to go through three key steps of design, production and packaging and testing.
Image source: Fang Securities Research Institute
But on the whole, domestic chips have mainly achieved breakthroughs in some high-end chips, as well as the replacement of some low-end chips, and there is still a big gap with international giants in the fields of CPU, GPU, FPGA and memory chips.
In the field of packaging and testing, the mainland has formed obvious advantages. According to Chip Insight statistics, according to the location of the headquarters, among the top ten outsourced testing companies, there are five in Taiwan, with a market share of 40.7%, and three in the Chinese mainland, with a market share of 20%.
The biggest shortcoming of the mainland chip industry chain lies in the manufacturing link, if it is traced upstream, it is due to the restriction of equipment and material extraction, and insufficient independent support.
The two most important equipment for the production of chips are photoresists and lithography machines, and domestic companies have also joined in the research and development of these two devices. At present, the photoresist has broken the monopoly of the international market, but the lithography machine is still subject to people.
The main reason is that the core components of a top lithography machine come from different countries, such as light grids in the United States, lenses in Germany, bearings in Sweden, valves in France, etc.
The procurement of equipment and core components and materials for Lithography in China is firmly limited by a provision called the Wassenaar Agreement.
The Wassenaar Agreement, whose full name is wasenaar Agreement on Export Controls of Conventional Arms and Dual-Use Products and Technologies, has 40 member States, including the United States, Japan, the United Kingdom and Russia.
Although the Wassenaar Agreement provides for member States to decide for themselves whether to license the export of sensitive products and technologies and to inform other Member States on a voluntary basis of such information, it is in practice under the complete control of the United States.
At present, the world's most advanced EUV lithography machine is only produced by ASML in the Netherlands. As early as 2018, SMIC had ordered an EUV lithography machine from ASML that could be used for the production of process chips below 7nm, but due to obstruction from the United States, the Dutch government has not issued an export license to ASML, resulting in the EUV lithography machine has not been delivered to SMIC.
It is not that China cannot build lithography machines, but it cannot make high-end lithography machines. At present, Shanghai Microelectronics can already build a lithography machine with a 90nm process, and said that it will deliver a 28nm lithography machine this year. But compared with the industry's most advanced Dutch ASML 7nm, 5nm EUV lithography machine, the distance of several generations of products.
The output scale of China's local chip manufacturing enterprises is relatively small, the process level is relatively backward, and many key raw and auxiliary materials and process equipment for production rely on imports, and their competitiveness is weak.
Overall, China's semiconductor industry is not very strong, but it is not poor.
But this does not affect the domestic chip in the car to take the lead in the breakthrough, the reason is that compared with mobile phones, computers and other electronic products, the chip process requirements used in cars are not so high.
For example, the SoC chip of high-end mobile phones is already a 5nm process, and on the automotive side, in addition to the AI chips required for smart cockpit and intelligent driving, most automotive chips only need a 28nm process to meet, which is why TSMC is busy expanding the 28nm chip production line.
More and more chip companies have seen this dawn and taken action.
04
China's Silicon Valley "Oriental Core Port"
The term "Silicon Valley" was coined in 1971 by American author Don Hoefler, and it was used on January 11, 1971 as the title of a series of articles in the weekly business newspaper electronic news, Silicon Valley in the United States.
The reason why there is a "silicon" in the name is precisely because most of the local companies are related to semiconductors.
Silicon Valley has long represented the global highland of technological innovation.
Where is China's Silicon Valley? The north, Shanghai, Guangzhou, and Shenzhen, as well as a number of new first-tier cities, are trying to grab this name.
Shanghai has never lacked ambition or hidden ambition.
After Huawei was sanctioned, the semiconductor industry, from the national strategy down to the public sentiment, has reached an unprecedented height, vowing to change the situation of chip card neck.
In August 2020, the State Council issued the "Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era", which plans to achieve a self-sufficiency rate of integrated circuits in mainland China to reach 70% by 2025.
According to data released by the China Semiconductor Industry Association, in 2020, the self-sufficiency rate of mainland chips is only 26.6%, of which the self-sufficiency rate of automotive chips is as low as 5%.
In March 2021, Shanghai Lingang New Area issued the "Special Plan for the Integrated Circuit Industry (2021-2025)", directly proposing to build a world-class "Oriental Core Port".
Shanghai's encouragement of the semiconductor industry is real money, and at the beginning of 2022, Shanghai has sent a new round of subsidy policies:
"Shanghai will subsidize 30% of the city's investment in major integrated circuit equipment materials projects, with a support amount of up to 100 million yuan; 30% subsidies for EDA, basic software, industrial software and other project investment, up to 100 million yuan; 30% of the subsidy policy also applies to tape-outs for chips with nodes smaller than 28 nanometers; in addition, Shanghai also provides subsidies of up to 500,000 yuan for high-skilled semiconductor professionals employed in Shanghai."
In fact, not only Shanghai, but also Beijing, Tianjin, Anhui, Gansu, Shandong, Hubei, Sichuan and other places have also followed up and introduced industrial development policies. According to incomplete statistics, 28 cities have introduced special fund support policies for the integrated circuit industry.
These supportive policies cover many aspects from research and development, production to enterprise operation.
For example, as a key link in the integrated circuit design industry, the tape-out film accounts for a relatively high proportion of the overall R&D cost of the enterprise, such as for chips applied to cutting-edge technologies such as communications, artificial intelligence, blockchain, etc., the tape-out cost accounts for more than 50% of the enterprise's R&D cost, and the tape-out cost of chip design enterprises in the traditional field also accounts for nearly 20%, so most cities will use the tape-out subsidy as an important means to encourage enterprises to increase R&D investment, and have been given key support.
In addition to research and development, local support policies also penetrate into the operation and management of enterprises, including tax reductions, tax exemption policies, high-end talent subsidies, land use, equipment support, etc.
Overall, the mainland has formed a full range of industrial support policies, providing a good industrial environment for the development of the semiconductor industry.
Outside of policy, the market is the biggest driver.
For two consecutive years, the automobile industry has faced a serious core shortage dilemma, which has also allowed a number of domestic chip manufacturers to see opportunities. Flipping through the 2021 semi-annual report of domestic chip companies, many chip companies have revealed a positive attitude towards localization substitution, and gradually carried out the layout of vehicle-grade chip products.
At the same time, with the split and independent listing of BYD Semiconductor, more and more car companies have begun to pay attention to the layout of automotive chips, and head car companies have begun to act.
Since the beginning of 2022, two projects have been finalized.
On January 24, GAC Group and CRRC Times established a joint venture company, and the two sides will carry out research and development and application in the field of new energy vehicle IGBT, with a total investment of about 463 million yuan and a total production capacity of 600,000 pieces per year.
On January 27, SAIC Motor announced that it will carry out strategic cooperation with the Shanghai Microtechnology Industry Research Institute and initiate the establishment of a multi-billion yuan "domestic automotive chip special fund" to jointly promote the accelerated landing of the vehicle regulation-level "China Core".
……
It can be expected that in 2022, the layout of domestic automotive chips will be more and more.
-END-
bibliography:
Attack on China's IGBT
https://wallstreetcn.com/articles/3647473
Behind Tesla's "betrayal" of Nvidia is a chip war of autonomous driving
https://www.huxiu.com/article/216554.html
Depth: Chip giants' battle for autonomous driving
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Losing Huawei's orders, TSMC live more "moist"?
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Summary of integrated circuit industry policies of provinces and cities in mainland China
https://www.aisoutu.com/a/1039347
"Core" wants to succeed: the game and breakthrough of China's chip industry
https://weread.qq.com/web/reader/c3232070715f350ac322599
Lithography machine 100,000 parts, is there made in China?
https://zhuanlan.zhihu.com/p/145463756
A figure to read: the gap between domestic chips and foreign chip companies
https://cloud.tencent.com/developer/article/1727771