Chips are one of the key factors driving safer, more efficient and more comfortable cars, and the competitiveness of the automotive chip industry will determine the competitiveness of China's future automotive industry, and to a certain extent, it also reflects the overall competitiveness of China's chip industry.
European, American and Japanese giants account for nearly 95% of the share of automotive semiconductors, and the overall market share of Chinese companies is extremely low.
Among them, the leading enterprises in the industry, Infineon (Germany), NXP (Netherlands), Renesas Electronics (Japan), Texas Instruments (USA), STMicroelectronics (Switzerland, France and Italy), Bosch (Germany), ON Semiconductors (USA), etc. have the advantage of being the leaders in the industry, and from 2019 to 2020, the top five automotive semiconductor companies (Infineon, NXP, Renesas Electronics, Texas Instruments, ANDMIC) account for nearly 50% of the global market share (see Figure 1).
The dilemma and problems of the development of China's automotive chip industry
(1) The localization rate is low, which is extremely incompatible with the status of the automobile power
On the one hand, China's auto chip companies are facing technical and technological limitations in design and manufacturing, and on the other hand, affected by the first-mover advantage of the traditional automotive chip industry in customers, they have not yet been able to form an automotive chip enterprise with significant competitiveness in the world, and their share in the global automotive chip market is extremely low. According to Gartner data, in 2019, the market share of Europe, the United States and Japan in the global automotive semiconductor market reached 36.8%, 32.1% and 26.0% respectively, and China only accounted for 2.5% of the global market, far lower than the global market share of China's integrated circuits, and it is extremely disproportionate to the status of China's automotive power.
From the specific situation of the automotive chip segmentation field: although China has accelerated its layout in the field of third-generation semiconductors, it has certain advantages in low-end diodes and low-voltage MOSFETs, but there is almost no market in the field of IGBT and other fields with a high level of technology; in the MCU field, although there are also some new enterprises, the market share is extremely low; memory chips are basically monopolized by foreign giants, and gigabytes innovation in domestic enterprises. Wanghong Semiconductor and Beijing Silicon Cheng launched a series of chips that can meet the current automotive storage needs, to a certain extent, to meet the needs of enterprise storage; analog chips have emerged silicon Jie, Shengbang Micro, Si Ruipu, Core Sea Technology and other emerging enterprises, but due to the monopoly and user stickiness of traditional international giants, the market share in the field of analog chips is also extremely low; in the field of sensors, the traditional field of visual sensors china occupies a higher market share, and the traditional technology field of ultrasonic radar also has certain competitiveness. However, micron bo radar is basically monopolized by foreign countries, and lidar and foreign countries are still on the same running line.
With the acceleration of innovation in recent years, China grasps the advantages of the new generation of information revolution and technological revolution, and is expected to obtain a "latecomer advantage" in the next generation of automobile industry. However, in the context of the United States' suppression of China's high-tech industry, China's global mergers and acquisitions in the field of automotive chips are almost difficult to pass, the procurement of key equipment and materials is greatly restricted, and the technical and commercial cooperation with leading enterprises is bound to be affected, which will directly affect the normal development of China's automotive chip industry. In addition, due to the impact of the new crown pneumonia epidemic, the increase in the stockpiling of downstream automobile manufacturers, and the overloading of fab capacity, automotive chips have fallen into a serious shortage dilemma, which has greatly affected the safety and stability of the automobile manufacturing industry, especially in China's automotive industry, which is in the catch-up stage. From the end of 2020, Volkswagen, Ford, Honda, Toyota, Fiat Chrysler, Nissan, Daimler, GM, Volvo and other automakers have successively announced production cuts or short-term suspensions due to insufficient chip supply, and domestic automakers such as Weilai have also announced production cuts. Since China has become the world's largest automobile manufacturing and consumption country, but the self-sufficiency rate on automotive chips is only 2.5%, this will further encroach on the profit level of China's automobile manufacturing industry, and even directly affect the innovative development of the automobile industry, which is not conducive to the long-term development of the automobile industry and the chip industry.
Further, with the digitization, interconnection and intelligent development of the automotive industry, the automobile has become an important source for recording the geographical information and personal information of the population and even the privacy information, and the security of the information recorded by the automobile has become an important part of the future national security and information security. In the case of a very low market share of domestic automotive chips, the information security and national security issues brought about by the intelligent development of the automotive industry need to be fully paid attention to.
(2) Key core technologies are subject to people, and it is difficult to break through the learning curve
Semiconductor is the key content of the automotive industry to obtain core competitiveness in the future, the automotive industry in recent years in the interconnection, electrification, automatic driving, diversified travel modes, vehicle digital management and other aspects of innovation are driven by semiconductors, access to the core advantages in the semiconductor field can also provide basic power support for the high-quality development of the automotive industry. However, China is greatly constrained by the key core technologies of automotive chips, and the tacit knowledge of leading companies in the industry is difficult to grasp in the short term.
The upstream and downstream of the industrial chain are facing severe external pressure, and the overall competitiveness of domestic enterprises in the chip industry chain is weak. First, in terms of the basic materials of automotive chips, high-end materials are subject to developed countries such as the United States, Japan, South Korea and Germany. For example, the main production processes of the third-generation semiconductor materials GaN and SiC are monopolized by developed countries, and companies such as Cree, Infineon and Rohm have absolute say; the selection and manufacturing process of IGBT and high-voltage MOSFET materials is difficult to break through in the short term. Second, in the chip design process, DEA software and exclusive IP cores form a huge industrial ecology, and it is extremely difficult for Chinese companies to break through. Third, the leading enterprises in the manufacturing process occupy the absolute right to speak, TSMC, Samsung, etc. hold the main production capacity of global chip foundries, in the context of limited imports of advanced process equipment, the industrial expansion of domestic manufacturing is difficult to break through quickly in the short term.
As an industrial-grade automotive chip, compared with consumer-grade chips, there is also a significant feature that the industrial update iteration cycle is relatively long, and the reliability requirements of the product are higher, which determines that there is a tacit knowledge barrier that is difficult to break through in the production process of automotive chips. With the "trade war" launched by the United States to suppress the development of China's economy, especially in the high-tech field, China's automotive chips and related industries are integrated into the global technology and industrial system, as well as the way to achieve optimal allocation of resources through sufficient capital and other means is bound to face more stringent "audits", and Chinese companies can only catch up with the latecomers in this field through long-term development.
(3) There is a lack of leading enterprises, and it is difficult to compete effectively in the global market
From the perspective of the growth path of the global automotive chip giant, it mainly continues two growth routes. First, traditional manufacturing enterprises, especially large electronic manufacturing enterprises, split, independently or cooperate with other enterprises in their own business involving semiconductors to become specialized semiconductor enterprises. For example, NXP became independent after being spun off from Philips, Infineon was separated from Siemens Semiconductors, Renesas was split from NEC and later integrated with Mitsubishi Electric Semiconductor Division, ST Is the product of SGS and Thomson's restructuring, Bosch Semiconductor is a company within the Bosch Group, and ON Semiconductor was formed independently by Motorola Semiconductors. Second, the chip industry actively intervenes in the field of automotive chips, such as Intel, Texas Instruments, NVIDIA, AMD, etc., actively grasps the needs of the development of the automotive industry, and launches new products that can give full play to their own advantages and seize new market opportunities. Whether it is the former model or the latter model, it is an extension of the company's own core competitiveness towards the field of automotive chips, and the basic conditions of the company's knowledge, technology, talents, capital, and market are superior, forming an overall growth model led by leading enterprises.
At present, a number of innovative enterprises have emerged in China's automotive chip industry, but the scale of enterprises is relatively small, and the ecological chain of chip companies and automobile manufacturers is insufficiently integrated, and it is difficult to form large-scale industry leading enterprises to participate in global competition. From the perspective of the global enterprise industry market situation in 2020, Toyota Motor still has 9.528 million units despite a 11.3% year-on-year decline in global sales; BMW, which ranks ninth, has sold 2.325 million units; and Volvo Cars, ranked tenth, has sold 662,000 units. In stark contrast, China's largest automaker, Geely Automobile, also sold only 2.1 million units (including Volvo) in 2020, while BYD sold 394,600 units in 2020. China's auto companies are small and scattered, it is difficult to form large enterprise groups such as developed countries in Europe, the United States, Japan and South Korea, failed to form a highly centralized automotive industry competition pattern, naturally in terms of knowledge, technology, talents, capital, market and other aspects of the leading edge, it is difficult to increase investment in the promotion of automotive chip research and development and bear the high risk of this industry, the industry catch-up is facing greater pressure.
The automotive chip industry is also similar, although the emergence of Huawei, SMIC, Tsinghua Unigroup (is undergoing asset restructuring) and other chip industry leaders, but the overall scale and comprehensive competitive strength of enterprises is relatively small, failed to have a voice in the industry, and its own strength is difficult to allow its diversified development in the chip field, in the context of emphasizing the breakthrough of key chips, especially high-process logic chips, the spillover and driving effects of related chip companies on the development of enterprise chips are difficult to appear.
(4) User path dependence, enterprise access difficulties
In the engineering management of chip manufacturing, automotive chips are completely different from industrial and consumer chips, which require a highly reliable and highly complex manufacturing process. Compared with consumer chips and general industrial chips, vehicle-grade chips have more stringent requirements in terms of temperature, humidity, error rate, and use time, resulting in a long development cycle and great difficulty. At the same time, due to the personal safety involved, extreme safety and reliability are required. Therefore, for automobile manufacturing enterprises, especially brand enterprises, in order to ensure the reliability and stability of product quality, the use of leading enterprises and mature suppliers in the industry is their common choice, and it is very difficult for new and late-developing suppliers to enter the automobile supply system. In addition, due to the long-term and stable "lock-in" relationship formed by automotive chip companies and automobile manufacturing enterprises, the upstream and downstream have formed a relatively stable situation in terms of equity, business, social network, etc., and it is extremely difficult for other suppliers to enter the supply chain of automobile manufacturers, which will greatly hinder the market entry of Chinese automotive chip companies.
Countermeasures to enhance the competitiveness of the automotive chip industry
Based on the basic reality of the development of automotive chips and the current outstanding problems, it is recommended to strengthen the attention to this subdivision of the industry, promote the development of the industry and the improvement of competitiveness with differentiated policies, give full play to the advantages of large enterprises, lead the breakthrough of key core technologies of automotive chips, and strengthen the construction of the ecosystem to form a good internal and external circulation mechanism between industries and within the industry.
(1) Scientifically grasp the characteristics of the industry and support the development of the industry with differentiated policies
From the perspective of the structure of the chip industry, the market share of automotive chips is only 2.5%, even far lower than the market share of 4.9% of all integrated circuits, while paying great attention to the domestic substitution of the integrated circuit industry and the realization of scientific and technological self-discipline and self-improvement, we must attach great importance to the subdivision industry of automotive chips, and strive to give priority to breakthroughs in the field of segmentation. The first is to take advantage of the opportunity of the relatively low process of automotive chips, take advantage of China's advantages in manufacturing, accelerate the layout from the perspective of the whole industry chain and all factors, make up for China's basic shortcomings in equipment, materials, software, etc., and also create conditions for future breakthroughs and improvements in higher processes. The second is to grasp the development opportunities of some emerging segments in the field of enterprise chips, such as lidar, third-generation semiconductors, RF chips and other giant market share is relatively low and in the rapid growth of subdivisions, accelerate the cultivation and promotion of the rapid growth and accumulation of related segments, and form a comparative advantage. The third is to further deepen the opening up of the semiconductor field to the outside world, strengthen the interaction and exchange in the semiconductor field, encourage the exchange between enterprises in the industry and counterparts at home and abroad, encourage the coordinated development of automobile enterprises and chip companies, strengthen the sharing of knowledge among enterprises in the industry, quickly accumulate learning experience in the industry, and improve the yield and reliability of chip manufacturing. The fourth is to optimize industrial support policies, especially the policy guidance for vehicle companies, and encourage them to give priority to the use of domestic automotive chips in specific fields and scenarios, which can help Chinese automotive chips enter the user side and continuous improvement on the one hand, and improve the level of information security to a certain extent.
(2) Give full play to the advantages of large enterprises and lead breakthroughs in key core technologies
The types of automotive chips are more diverse and complex, not only need to be in the field of subdivision of innovative enterprises to continue to make breakthroughs, but also need to give play to the advantages of large enterprises, especially leading enterprises in capital, technology, talent, market and other aspects, to lead the breakthrough of key core technologies of enterprise chips. The first is to give full play to the advantages of state-owned enterprises, especially state-owned enterprises such as machinery manufacturing, electronic information, and military enterprises, with strong strength and fault tolerance, encourage their later integration to extend into the automotive chip industry, and also take advantage of the opportunity of state-owned enterprises' state-owned asset reform to act as venture investors and strategic investors. In addition, consideration can also be given to supporting basic research with a certain proportion of capital in the process of capital operation to ensure a long-term support mechanism for basic research on automotive chips. The second is to give full play to the professional advantages and user advantages of leading enterprises in the automotive and chip industries, increase support and integration for upstream and downstream enterprises in the industrial chain, and coordinate to promote the joint research and development and breakthrough of key core technologies to form a joint force for industrial development. The third is to give full play to the advantages of industrial alliances and technology alliances, take leading enterprises as the traction, increase the research and development of common technologies of automotive chips, and provide the underlying and public technology supply for industrial technological innovation and industrial development.
(3) Pay attention to the construction of the ecological circle and promote the effective internal and external circulation of the industry
On the one hand, automotive chips are a field that includes two major industrial categories of automobile manufacturing and integrated circuits, and different industries have different economic and technical characteristics, which requires strengthening cross-border integration between industries in the development of automotive chips. It is necessary to coordinate the relationship between car users and auto chip suppliers in the relevant policy support of automotive chips, and build a good cooperation ecology between suppliers and users.
On the other hand, the high viscosity of the upstream and downstream of the automotive industry and the requirements for the reliability of basic components determine that there is a "high threshold" dilemma for automotive chip latecomers to enter the market. To this end, it is necessary to pay attention to the market entry problem of automotive chip enterprises, give play to the synergy in the industry, provide ample market space for upstream chip design and manufacturing enterprises, and provide effective application scenarios for various raw material production and equipment manufacturing enterprises, which will not only help the breakthrough of the industry, but also contribute to the long-term sustainable development of the industry. First, it is necessary to give play to the guiding role of the government, industry groups or leading enterprises, and build a social coordination network between upstream and downstream industries and horizontal enterprises. The second is to make good use of the "first set" and "first edition" and other related preferential policy opportunities, not only to give support to innovative breakthrough enterprises, but also to give users support, reduce the opportunity cost and risk loss compensation caused by users using domestic alternative equipment and materials. The third is to focus on giving full play to the advantages of the capital market, strengthen the industry concentration through industry integration, cross-border mergers and acquisitions to enhance industry concentration and rapidly enhance industrial competitiveness, such as Weier's acquisition of Howey and Beijing Junzheng's acquisition of ISSI, which will rapidly increase the production capacity of automotive chips in the field of CIS and SRAM.
Author: Li Xianjun is an associate researcher at the Institute of Industrial Economics, Chinese Academy of Social Sciences
Source: Industry Blue Book: Report on China's Industrial Competitiveness (2021)
END
The author of this article: Tianjin Institute of Materials Commission
Editor-in-charge of this article: Wang Ningning
Share a little bit
Thumbs up