Since the 2018 ZTE and Huawei incidents, the semiconductor industry has been a pain for China. Since 2020, the soaring price of chips has been visible to the naked eye, and after entering 2021, there has been a crazy upward trend, with an increase of 10% to 20%.
Huawei was affected by the core, and its global market share dropped from the third in 2020 to the seventh in 2021, resulting in the difficulty of finding a Huawei mobile phone, and the long waiting time of users, who have opened the spit mode.
Xiaomi's flagship machine, the Redmi Note 10, launched in India in March 2021, costs about $161, but by July, the retail price has risen to $174, up about 8%, due to the shortage of production capacity. At the same time, the Xiaomi 11 Ultra launched in India in April was also delayed until July last year due to lack of cores.
Chip shortages are not a phenomenon unique to China, but a commonality in global manufacturing. For Chinese companies, the lack of cores affects not only production capacity, but also the deeper problem is that the shortage of core technology of chips will be more constrained.
We still have many unanswered questions: Why did China build an atomic bomb but not a lithography machine? How does China face and solve the chip card neck problem?
Why can China build an atomic bomb, but not a lithography machine?
China is not unable to create a lithography machine, but at present, it can not produce a high-end lithography machine, such as Shanghai Microelectronics can already create a 90nm process of lithography machine, and it is rumored that it will deliver the first 28nm process of lithography machine in 2021-2022, but this is still a big gap compared to the industry's most leading Dutch ASML company's 7nm or even 5nm EUV lithography machine. So what we have to discuss is not only whether it can be built, but also whether it is good enough.
As a topic at the military strategic level, the atomic bomb can not be built or not is the core. After the atomic bomb has achieved a theoretical breakthrough, as long as it has overcome the engineering difficulties such as high-concentration nuclear raw materials and centrifuges, it can be detonated, and even if the atomic bomb is built, its strategic deterrent effect will be achieved; as for how large the equivalent of the atomic bomb, how far the voyage is, and how accurate it is, it is a problem that is not good enough, which can be left for slow solution later, that is, its technical iteration cycle may be longer.
But the lithography machine is different, just making it is not enough, it must be good enough to make sense. For example, in the most competitive mobile phone market, if the competitor's flagship mobile phone SOC chip uses the most advanced 7nm or 5nm process, and you are still using 14nm, then your mobile phone performance will definitely lag behind and you will lose market competitiveness.
What is the technical difficulty of lithography machines?
The difficulty is that it is the product of the top theories, technologies and processes across multiple disciplines and industries. Lithography machine is known as "the jewel in the crown of semiconductors", a lithography machine consists of more than 100,000 components, is a collection of mathematics, chemistry, precision optics, fluid mechanics, precision machinery, automation control, software engineering, image recognition, electronic circuits and other fields of the top technology products. Therefore, the manufacture of lithography machines depends on the progress of various disciplines, as long as one of the disciplines has a bottleneck, it cannot be created.
How does China face and solve the chip card neck problem?
Chinese companies have never been "scared", and the shortage of chips cannot restrict the growth of Chinese companies. Taking mobile phone companies as an example, the chip problem has stimulated their fighting spirit to make chips.
In March 2021, Xiaomi released its self-developed image chip Surging C1.
In September, Vivo released its self-developed image chip V1;
At the end of the same year, OPPO announced that it would invest 50 billion yuan in chips in three years.
Core building is actually an arms race about the future.
Lei Jun, the founder of Xiaomi, who has been benchmarking Apple, said: "A large number of technical thresholds and technical accumulation in the hardware industry are finally reflected in the form of chips. Today's global shortage of chips is bound to have a major impact on Xiaomi, and Xiaomi wants to become a truly global technology leading company, and the chip battle cannot be bypassed. ”
The same thing, OPPO founder Chen Mingyong also mentioned. If OPPO is constrained by the lack of cores for a long time, there can be no future.
Therefore, domestic companies are scrambling to lay out the chip industry to reduce the adverse impact of global core shortage, hoping to seize the initiative in the future.
For example, OPPO, according to public information, since 2020 OPPO has been recruiting people on a large scale, forming a chip team, and poaching many employees of domestic chip manufacturer Unigroup Zhanrui.
Another example is Xiaomi, in 2014, Xiaomi established Beijing Xiaomi Songguo Electronics Co., Ltd. to develop mobile phone SoC chips. By December 2021, another enterprise named Shanghai Xuanjing Technology Co., Ltd. was established, covering integrated circuit design and chip sales, with a registered capital of 1.5 billion yuan, which is generally believed to be another new platform for Xiaomi core manufacturing.
In December last year, Xiaomi announced its self-developed surging fuel gauge chip, which will be used for the new battery to be mass-produced in the second half of 2022. Through the chip's local monitoring function, Xiaomi mobile phones can detect users' night charging habits and avoid long-term full charge, thereby extending battery life.
Giant Huawei laid out chips earlier. From 2006 to develop its own mobile phone chip, in 2009 released the first generation of mobile phone chip K3V1 using 110-nanometer process, after years of iteration, until the launch of the first Kirin chip in 2014, finally recognized by the industry. Since then, Huawei has taken advantage of the trend of launching high-end mobile phones with self-developed chips as the selling point, and quickly seized the global market, surpassing Samsung at the highest share and ranking first in the world.
However, from the public reports, whether it is Xiaomi or OPPO, what they launch in 2021 is not a SoC chip like Huawei's in-depth research and great success, but an image chip. But this does not prevent them from wanting to take autonomy in their hands and break the urgent psychology of the lack of core on their own impact.
The lack of cores has sounded a wake-up call for Chinese enterprises. In the past few decades, the right to speak in the chip industry has been in the hands of companies such as Samsung, Qualcomm, and ASML, and has almost formed a monopoly. And once these companies or chip industry chains are affected by the market, Chinese related enterprises will sneeze. This has led to Chinese companies being very passive and prone to falling into the trap of stuck necks.
If the problem of card neck cannot be solved, Chinese enterprises will always be subject to people in core technology, which is a technical difficulty that China must overcome in high-end intelligent manufacturing.
Recently, Fuman Electronics, Litong Communications, Zhuoshengwei, etc. have all said that they have developed pure domestic 5G RF chips, filling the gap in the domestic chip industry in this field, showing that domestic chip substitution is constantly making breakthroughs.
This global chip shortage has a profound impact on the global manufacturing industry, From which Chinese manufacturing has deeply realized the importance of the chip industry's self-reliance and self-reliance, and has also benefited from it, and now China is actively promoting the development of the chip industry, hoping to achieve a domestic chip self-sufficiency rate of 70% by 2025, according to the current development momentum is likely to achieve this goal.