Liu Hongchun, founding partner of Zhejiang Rongyi Investment: There are two major opportunity directions for the domestic chip industry to break through

21st Century Business Herald reporter Luo Yiqi Dongguan report On October 12, at the 2021 China Intelligent Manufacturing Industry Annual Conference and Semiconductor Industry Summit jointly sponsored by Dongguan Municipal People's Government and Southern Finance All-Media Group, 21st Century Business Herald and Dongguan Municipal Bureau of Industry and Information Technology, Liu Hongchun, founding partner of Zhejiang Rongyi Investment Management Co., Ltd., believed that the lack of core problems faced by the industry today originated from the changes in the semiconductor supply policies of overseas countries to China's high-tech enterprises. This has caused interference with the global semiconductor supply chain. Later, the new crown pneumonia epidemic caused a huge impact on the semiconductor supply chain in all aspects, including two aspects: on the one hand, the "home economy" increased the demand for electronic consumer goods such as PCs, tablets, and mobile phones, and on the other hand, the isolation policies of various countries with the changes of the epidemic caused a huge impact on the stability of the semiconductor supply chain.

The core reason for the impact is that after years of development of the semiconductor industry, the global industrial division of labor is very meticulous, and exclusive suppliers have appeared in many segments, and once there is a problem in a certain supply chain link, it is easy to cause a series of problems. "People in the industry will know that the core of the stability of the supply chain lies in whether there are multiple reliable suppliers. The semiconductor industry has the characteristics of capital-intensive, technology-intensive, and talent-intensive, and there are many de facto exclusive suppliers, and once one or two upstream material companies have problems, they will gradually affect all subsequent enterprises in the industrial chain. He further pointed out.

(The picture shows Liu Hongchun, founding partner of Zhejiang Rongyi Investment Management Co., Ltd.)

Liu Hongchun introduced that Rongyi has invested in many companies that apply various types of chips, "We have invested in many automotive electronics companies that are now particularly affected, which fully demonstrates the importance of customer supply chain security and the need for backup replacement solutions." ”

At present, the situation of chip tension has been alleviated to a certain extent, and the memory chip has even begun to show a continuous decline in price recently, but the production capacity of MCUs, analog devices and other mature process routes has still been greatly affected, which has a huge impact on the automotive and other industries. He said that for example, the leading automotive electronics enterprise in a certain field invested by the fund introduced a domestic chip supplier with independent intellectual property rights this year, which was originally unimaginable, but this year it was introduced because of the shortage of goods.

Talking about the direction in which the domestic industrial ecology in the chip field can achieve a global breakthrough, Liu Hongchun believes that the areas that have the opportunity to lead mainly lie in the application SoC chips that combine new original technology routes chips and scenarios. "It is true that there are still many outstanding semiconductor talents in China, who can form a global leading position through original and subversive innovation at some points." We invested in one of these businesses. ”

Regarding the key investment areas of semiconductors, Liu Hongchun is also very optimistic about the development opportunities brought about by the transfer of semiconductor production capacity to China. He mentioned that the Chinese market consumes nearly half of the world's chips, but from the perspective of domestic independent design companies and wafer foundry companies, it only accounts for 5%-6% of the global semiconductor production capacity, so there are great opportunities for development in related materials and equipment; in addition, there are still investment opportunities in the import substitution of some market segments.

Nowadays, the development of the integrated circuit industry has become one of the focuses of the Guangdong-Hong Kong-Macao Greater Bay Area, which is also determined by the endowments of the Bay Area itself. For the potential of developing the semiconductor industry in the Greater Bay Area, Liu Hongchun believes that the most active semiconductor industry is always the design company, and the design company basically follows the market, talent and production capacity.

Specifically, he pointed out that, first, from the perspective of the market, the style of start-ups in the Greater Bay Area is very pragmatic and dynamic, which is the most in line with the market economy's enterprise development model, and the 2C-side electronic consumer goods enterprises have fertile development soil here, and also bring sufficient market development opportunities to semiconductor companies. Second, from the perspective of talents, the Greater Bay Area itself has Huawei, ZTE, BYD and other world-renowned companies, and its semiconductor department team is very strong, has an international vision, and has a rich experience in research and development in technology; at the same time, the Greater Bay Area also includes well-known universities at home and abroad and their branches, and the semiconductor talents cultivated every year further support market demand. Third, from the perspective of production capacity, a number of well-known semiconductor wafer manufacturing and semiconductor packaging and testing enterprises such as Guangdong Core have settled in the Greater Bay Area, which can also effectively promote the development of the semiconductor industry in the Bay Area.

"Therefore, combined with the market, talents and production capacity, the entire semiconductor industry in the Guangdong-Hong Kong-Macao Greater Bay Area will make greater and greater contributions in China, and I am very confident in this development trend." Liu Hongchun continued.

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