JW Insights believes:
- In recent years, domestic CPU manufacturers have forged ahead and made continuous breakthroughs in process, performance, ecological construction and other levels, building a new fortress for the autonomy, control, security and credibility of CPUs.
- Domestic CPU manufacturers in the IP and instruction set architecture authorization level or there is a risk of being stuck neck or difficult to upgrade, and the independent development of instruction sets in turn face ecological barriers, becoming the two major barriers restricting the development of domestic CPUs.
- Domestic CPU manufacturers need to fight a protracted battle to kill a "core" road in the siege, and work hard for a long time at the level of CPU performance, ecology and advanced technology, while strengthening the integration of cloud pipe end and computing power, and accelerating vertical or horizontal integration in order to continue to make breakthroughs.
Recently, Aiji Micro released the "Top 100 Chinese Semiconductor Enterprises (2021)" list, in this list is pleased to see the four domestic CPU manufacturers Feiteng (36th), Haiguang (52nd), Loongson Zhongke (53rd) and Zhaoxin (58th) on the list, which can be said to be a major symbol of breakthrough progress in domestic CPUs.
The continent's high dependence on CPUs has become a huge weakness of the digital economy. Under the background of the great power game and scientific and technological power, the consensus of autonomy and controllability has been formed, and the CPU is the cornerstone of the digital era, and the road to localization is the road to freedom. Under the promotion of multiple factors, the main domestic CPU manufacturers Loongson, Zhaoxin Zhongke, Feiteng, Haiguang, Shenwei and Huawei have ushered in a broad space for development. This time Haiguang and Longxin zhongke list is proof of this.
As the "main force" supporting information security and network security, this report will mainly focus on the analysis of domestic CPUs in the server and PC fields.
Keep climbing
From the perspective of PC and server market demand, it still shows a strong growth momentum.
According to the latest IDC research data, by 2025, the shipment volume of China's PC market will reach about 67.66 million units. However, it should be pointed out that this mature market may face disruption in product form, customer base and architecture.
Thanks to the rapid growth of data centers, a digital world has been woven into a digital world, and the demand for servers has also risen. IDC expects the continental server market to reach $25.731 billion in 2022 and $41.029 billion in 2025, with a compound growth rate of 12.5%.
Judging from Gartner data, CPU shipments in 2021 are much lower than in 2020. However, in the future, driven by AIoT, cloud computing, digital transformation, etc., the CPU will come out of a short decline.
Due to the high threshold of research and development and the difficulty of ecological construction, THE CPU has always been called the "Mount Everest" of the IC industry. After years of hard fighting, Intel has defeated THE MIPS, SPARC, PA-RISC, Alpha, Power and other RISC processor camps, with technical advantages and patent barriers to build a moat, in the desktop and server CPU dominant position, occupying about 80% of the world's desktop CPU market and more than 90% of the server CPU market.
In the long run, China will still be the world's largest CPU consumer market. As a major manufacturer of electronic information terminals, if the mainland lacks effective response and preparation for key devices such as CPUs, it will have a very destructive impact on the national economic and social development. At present, the game between China and the United States in the field of science and technology has a long-term nature, the United States of Science and Technology sanctions lead to the international supply chain rupture and information security risks intensified, out of strategic security, industrial upgrading considerations, the mainland is continuing to increase support for domestic CPU research and development, application and other fields, domestic CPU is promising.
In particular, in order to promote the development of domestic CPUs, the mainland has set up a "Xinchuang Market". With the large-scale rollout of xinchuang projects in various places, the xinchuang industry has also emerged a phenomenon-level outlet, which will create a trillion-level market and will also greatly promote the great development of domestic CPUs, basic software and information security.
All-round advancement
Looking back at the soaring road of domestic CPUs, this is a gift of long-term cultivation.
During the Fifteenth Five-Year Plan, the state launched the Taishan Plan for the development of domestic CPUs, and the 863 Plan also proposed independent research and development of CPUs. In 2006, the nuclear high-tech project was launched, and the domestic CPU ushered in a new round of state support, and the domestic CPU manufacturers represented by Zhongke Longxin, Tianjin Feiteng, Haiguang Information, Shanghai Shenwei, Shanghai Zhaoxin, Huawei HiSilicon, etc. rose and fought in all directions.
Through years of hard work, driven by the joint drive of the international environment, industrial policy and market demand, the above-mentioned domestic CPU manufacturers have forged ahead and made breakthroughs in multiple levels such as process, performance, and ecological construction, which has built a fortress for the independent controllability, safety and credibility of the CPU.
At the product iteration and upgrade level, LoongArch has launched the autonomous command system LoongArch (LoongArch architecture) last year, released the 3A5000 based on this architecture, and the performance has greatly spanned, realizing from available to easy to use. The new generation of server processor Loongson 3C5000L can meet the performance requirements of cloud computing and data centers for domestic CPUs. The x86-based Haiguang CPU series products Haiguang No. 1 and Haiguang No. 2 have been commercially applied, Haiguang No. 3 is in the verification stage, and Haiguang No. 4 is in the research and development stage. Mega Core x86 CPU two series KX (Kaixian) and KH (Kaisheng) for the PC market and server market kaisheng, based on the new independent architecture design of Kaisheng and Kaixian processor samples have been successful, will soon be mass production. Feiteng continues to iterate the Arm-based high-performance server CPU Tengyun S series. The Shenwei Weiyan 831 processor, which does not take the usual path and adopts the "Shenwei 64" instruction set, has reached the domestic advanced level.
The ecological level involves hardware ecology and software ecology, and domestic CPU manufacturers are also focusing on expanding the "circle of friends". Loongson Zhongke has led the establishment of loongson ecological adaptation service industry alliance since 2020, and nearly 100 manufacturers have launched hundreds of LoongArch-based LoongArch desktops, servers, network security, passwords and other products, and in terms of core operating system, Loongnix for desktop and server applications has also been formed, independent of Wintel and AA systems. Feiteng through the ecosystem construction, software and hardware adaptation, software and hardware compatibility certification, solution customization and other initiatives to actively improve the ecology, as of the end of June 2021, Feiteng hardware and software partners have more than 2300, Feiteng CPU has completed 4439 software adaptation and optimization with 1627 software manufacturers. Shenwei, which does not take the usual path, the unified operating system UOS Shenwei version has been applied to Shenwei 421 series and Shenwei 1621 series models.
From the perspective of application, it is also remarkable to evaluate. Since 2021, Feiteng CPU products have sold more than 2 million pieces, which are widely used in information infrastructure, converged infrastructure, innovation infrastructure and other fields, ranking first in the government information creation market. Loongson Zhongke series products have been widely used in e-government, energy, transportation, finance, telecommunications, education and other industries. In addition, Haiguang CPU series products are compatible with x86 instruction set and international mainstream operating systems and application software, widely used in telecommunications, finance, Internet, education, transportation and other important industries or fields. Huawei launched the Kunpeng 920 in 2019, as well as the Kunpeng 920-based TaiShan server and HUAWEI CLOUD service, although affected by the ban, but the ecosystem is also booming.
It is worth mentioning that Loongson Zhongke and Haiguang are the first to land on the Science and Technology Innovation Board.
In November 2021, Haiguang Sci-Tech Innovation Board IPO application has been accepted. On December 17, Loongson Zhongke Science and Technology Innovation Board IPO was successfully held, and the listing was imminent. It is reported that Haiguang plans to raise 9.148 billion yuan for the research and development of a new generation of Haiguang general-purpose processors, coprocessors, and advanced processor technology research and development centers. Loongson Also plans to raise 3.512 billion yuan for advanced process chip research and development and industrialization projects.
Layer upon layer of worry
Although the domestic CPU as a whole has made no small breakthrough, at the time of geopolitical and industrial changes, the hidden worries of domestic CPU development have also surfaced
JW Insights believes that the hidden worries faced by domestic CPUs are mainly at three levels.
The first is the CPU core, which is the "cornerstone" for achieving autonomy and controllability. Domestic CPU manufacturers use different cores, but each has its own "difficulties".
There are three main routes for domestic CPU manufacturers: one is the instruction set + self-developed architecture represented by Loongson Zhongke and Shenwei; the other is the architecture based on Arm instruction set authorization represented by Feiteng and Huawei Kunpeng. Arm mainly has three authorization levels, and HiSilicon and Feiteng have obtained arm V8 permanent authorization; the third is to obtain x86 authorization represented by Haiguang and Mega Core (only the kernel level authorization), and it is difficult to expand the instruction set to form an autonomous and controllable instruction set in the future.
In general, ip nuclear authorization and instruction set architecture authorization have the risk of being stuck neck, and the independent development of instruction sets is facing application ecological problems, which are two major barriers restricting the development of domestic CPUs. Arm licensing is the sword of Damocles above the head of the ARM architecture CPU manufacturer. From the perspective of x86 kernel authorization, although the ecology is perfect, there are security and controllable and technical licensing barriers, such as Tianjin Haiguang since it was included in the entity list by the United States, AMD said that the latest architecture will no longer be authorized. Loongson Zhongke and Shenwei authorized + independent research and development of instruction sets to open the way, although the degree of autonomy and controllability is the highest, but its biggest bottleneck lies in ecological barriers.
Second, the CPU needs the cooperation of advanced processes. With the continuous pursuit of higher performance of the CPU, it will inevitably evolve in the direction of multi-core design, high-speed interface, advanced process and packaging process, and the domestic advanced process of foundry has been blocked, and it will take a long time to achieve a breakthrough from many aspects such as equipment and materials.
Third, breakthroughs at the ecological level are also difficult. At present, most of the domestic CPUs are concentrated in party and government organs, state-owned enterprises and institutions, and specific industries to have a certain degree of promotion and application, and breakthroughs in the commercial market still need time.
The game is reborn
In addition to the above-mentioned clear pattern, today's industry is facing many changes, coupled with the impact of the great power game, different enterprises are also trying various layouts, breakthroughs, verticals, etc. for the long term, so that the industry pattern has undergone subtle changes and have a long-term impact on future development.
On the one hand, the Arm architecture camp that swept through the embedded field is gathering a new group army to launch a new charge to the x86 advantage area. Apple took the lead in applying arm-based M series processors on Mac computers, and has achieved good results, while Google, Qualcomm and so on will also add a camp. In the field of server CPU, Amazon, Google, Marvell, Fujitsu, Alibaba, ZTE and many other powerful players are also competing to build Arm-based CPUs, with continuous improvement of performance and ecology, and head-on competition with x86 architecture.
However, in the face of the technical barriers and mature ecology of Intel x86 architecture, Arm's path is even more difficult. On the one hand, the development of Arm architecture server chips is difficult, not only complex design, but also extremely high requirements for performance and power consumption, which is undoubtedly a heavy investment and long-term battle. Moreover, whether it can be sold in bulk after development, and whether customers can use it without problems are even more invisible challenges. On the other hand, it is clear that the power of the x86 architecture moat cannot be ignored. According to TrendForce, server chips represented by arm architecture will still be difficult to compete with x86 until 2023.
It is worth noting that Huawei announced the sale of the x86 server business last year, indicating that it will focus on continuing to develop the high-value route of Kunpeng in the future. However, Huawei still has to face layers of tests such as how to solve manufacturing, build a complete Kunpeng ecosystem, and seize market opportunities.
On the other hand, the emerging open source RISC-V architecture is expected to become the third pole after x86 and Arm. THE RISC-V open source feature has attracted hundreds of tech companies including IBM, NXP, Western Digital, Nvidia, Qualcomm, Samsung, Google, Huawei, Alibaba, Red Hat and Tesla. According to Semico Research, the number of chips using the RISC-V architecture is expected to increase to 62.4 billion by 2025, with a compound growth rate of 146% from 2018 to 2025. However, it should be pointed out that x86 and Arm have formed a strong ecosystem in their respective fields, and RISC-V is difficult to replace in the short term, or gradually expand from the AIoT field.
At the level of the RISC-V market, what has caused heated discussion in the industry is that in March 2021, MIPS officially announced that it would abandon the self-developed architecture and turn to research and development RISC-V. By August Imagination announced that RISC-V-based ISA designs were re-entering the CPU market. Intel previously announced that the Horse Creek development platform based on the 7nm RISC-V architecture will debut in 2022, and even once wanted to acquire SiFive, an open source RISC-V-based chip design company, for $2 billion, but was rejected, a series of changes will have a long-term impact on the RISC-V landscape and even the entire semiconductor industry.
JW Insights believes that future competition is not only about CPU performance and ecology, but about testing the all-round capabilities and diverse computing power lineage from cloud to end layout and heterogeneous computing integration. In addition, DPU has risen, is with THE CPU, GPU together constitute the "three pillars of computing power of the data center", and Intel, Nvidia, AMD as the representative of the giants are fully bet, Intel has expanded to the DPU and GPU field, with the rise of GPUs and Nvidia has also begun to get involved in the CPU, DPU market, domestic CPU manufacturers should also respond to the times, multi-party layout, to build a new high value chain.
Protracted
Obviously, after facing the above challenges, domestic CPU manufacturers want to kill a "core" road in the siege, and may still need to adhere to a protracted war.
JW Insights believes that at the architectural level, Arm's authorization is limited by whether it is involved in the US ban, but on the other hand, if Kunpeng and Feiteng develop their own instruction sets based on Arm V8 in the future, the credibility of innovation will be significantly improved. For independent CPU manufacturers such as Loongson and Shenwei, the heavy responsibility of creating a third system independent of Wintel (Microsoft-Intel) and AA (Android-Arm) requires continuous improvement of basic software and application software ecological construction.
At the same time, at the market application level, it is also necessary to make breakthroughs from the xinchuang market to the enterprise-level market and the consumer market, especially the consumer market is the target market for domestic CPUs to make long-term breakthroughs, and it is also a testing ground for testing the real strength.
From the perspective of production capacity and advanced technology, domestic CPU manufacturers also need to strengthen supply chain management and response in these aspects to ensure future customer supply.
In the face of the powerful expansion river built by foreign giants, JW Insights also believes that domestic CPU manufacturers may be able to pool their efforts to integrate existing resources, carry out a certain degree of technical route merger, or use capital to acquire some related companies, and gradually use collectivization to oppose foreign collectivization, or can walk out of a distinctive domestic CPU breakthrough road.
Undoubtedly, the future development of domestic CPUs is still obstacles and difficulties, but in the face of the national security strategy and the self-sufficiency rate of domestic chips to reach 70% in 2025, this is another road that has to be taken. (Proofreader/Li Yan)