FPGA developed from logic verification has long been an important member of the processor chip family, playing an irreplaceable role in communications, data centers, and industrial fields, although it does not have a market size of tens of billions of dollars in the field of CPU and GPU, but its strength is still not to be underestimated. In recent years, due to the rise of AI, 5G, and heterogeneous computing, the value of FPGAs has been significantly improved.
The domestic FPGA market is also rapidly expanding driven by a new wave of technology, promoting domestic FPGA companies to continuously improve their technical strength, improve product layout, and make breakthroughs in more segments.
Market conditions
An FPGA is a very special chip that can be programmed by a circuit to change and configure the internal connection structure and logic unit of the device through software means to complete the established design function. Unlike fully customized ASICs (Application Specific Integrated Circuit ASICs), FPGAs are semi-custom circuits. Theoretically, if the gates provided by FPGAs are large enough, the logic functions of arbitrary ASICs and DSPs (digital signal processors) can be programmed.
Thanks to the high degree of flexibility and powerful parallel processing capabilities, FPGAs can play a role in all applications in the cloud, at the end, and in between, so the market size is expanding. According to market research firm Frost & Sullivan, the global FPGA market grew from about $4.34 billion in 2016 to about $6.08 billion in 2020, with an average annual compound growth rate of about 8.8%. With the growing demand in emerging market areas such as next-generation communication devices and artificial intelligence and autonomous driving technology, the global FPGA market size is expected to grow from $6.86 billion in 2021 to $12.58 billion in 2025, with an average annual compound growth rate of about 16.4%.
Compared with the global market, the Chinese market is growing faster. According to Frost & Sullivan, China's FPGA market grew from about 6.55 billion yuan in 2016 to about 15.03 billion yuan in 2020, with an average annual compound growth rate of about 23.1%. With the further acceleration of the domestic substitution process, it is expected that the size of China's FPGA market will reach about 33.22 billion yuan by 2025.
Domestic FPGAs started in the 1990s, are the first domestic categories in the processor chip, mainly used in the product verification link of IC design, as well as some multi-category, small dosage of various fields, so it is easier to break through from the downstream client. Based on the consumer electronics market, domestic FPGAs are now rapidly entering the industrial, communication and automotive markets, and the main products are gradually transitioning from low-end to high-end products.
6 major applications of traction
JW Insights believes that FPGAs have a good balance between flexibility, performance, power consumption, and cost, and the following six application directions will become its main growth drivers.
1 Network communication
Network communication is the most important application market for FPGAs. In the 5G era, the requirements for base station RF chips are higher in connection speed, delay, connection density, and spectral bandwidth, and the number of macro and micro base stations is also increased by 4G, and the amount of single base station FPGA chips will rise from 2-3 blocks of 4G networks to 4-5 blocks of 5G networks, driving the volume and price of FPGAs to rise together. According to Frost & Sullivan data, China's sales of FPGA chips applied to this field will reach 6.21 billion yuan in 2020, accounting for 41.3% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 17.5%.
2 Industrial automation
In industrial applications, FPGAs can replace ASIC technology, providing a more cost-effective solution. For example, FPGAs can be used as communications coprocessors to connect to Ethernet, flexible solutions can support multiple protocols through a single hardware platform, and FPGA-controlled motors are easily implemented through its embedded processor, real-time features, and digital encoders. According to Frost & Sullivan data, the Sales of FPGA chips applied to this field in the Chinese market will reach 4.74 billion yuan in 2020, accounting for 31.5% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 16.1%.
3 Data centers
Servers and storage, as the common infrastructure of data centers, require FPGAs to implement functions such as logic control, data conversion, function expansion, and system upgrades in order to cope with complex and changeable application scenarios. According to Frost & Sullivan data, China's sales of FPGA chips applied to this field will reach 1.61 billion yuan in 2020, accounting for 10.7% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 16.6%.
4 Automotive electronics
The automotive electronics industry's demand for FPGAs comes primarily from the processing of data acquired by multiple sensors, supported by FPGAs that can meet flexible I/O interfaces and high data rate requirements. As the level of autonomous driving in automobiles gradually evolves from Level 2 to Level 5, the number of sensors that perceive the environment will explode, requiring more communication interfaces and high data bandwidth, which will provide a broad market space for FPGAs. According to Frost & Sullivan data, the Sales of FPGA chips applied to this field in the Chinese market will reach 950 million yuan in 2020, accounting for 6.3% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 22.7%.
5 Consumer electronics
The biggest opportunity for domestic FPGAs in the field of 5G is in the field of consumer electronics at the user end, especially in the field of various audio and video conversion interfaces, as well as various communication protocol conversion interfaces. The reason is that the FPGA chip is programmable, and the characteristics of multi-I/O are very suitable for the design of various types of conversion interfaces. According to Frost & Sullivan data, China's sales of FPGA chips applied to this field will reach 940 million yuan in 2020, accounting for 6.3% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 13.0%.
6 Artificial Intelligence
Artificial intelligence application scenarios have high requirements for the inference ability of terminal devices, and traditional CPU-based computing architectures cannot fully meet the needs of high-performance parallel computing of artificial intelligence, which is what FPGA with low power consumption, heterogeneous computing, short development cycle, and flexible programming is good at. According to Frost & Sullivan data, China's sales of FPGA chips applied to this field will reach 580 million yuan in 2020, accounting for 3.9% of China's FPGA chip market share, and the average annual compound growth rate from 2021 to 2025 will reach 16.9%.
To challenge the high end, there are many challenges to be met
Domestic FPGAs are moving from low-end to high-end, but this process will face many complex challenges.
First of all, the development of FPGAs has a high threshold. Specifically, FPGA layout and routing are complex, the hardware structure required is cumbersome and the yield is low, and the diversity, complexity, and efficiency of the application scenario need to be considered when programming and designing. At the same time, the editable features make it necessary to use with the EDA supporting software part, so FPGAs not only need to specialize in IC design, but also have the ability to independently develop EDA software suitable for the hardware part. At present, the domestic FPGA original large-scale EDA tools focus on 100k logic scale, once more than 350k, the EDA algorithm complexity will increase exponentially, which is a greater challenge for each original factory.
Secondly, in terms of production and processing, from wafer foundry to packaging and testing, the domestic industrial base is still relatively lacking. Most of the domestic product shipments are concentrated in the 40nm, 55nm process, and there is still a process gap of about 2 generations with foreign mainstream products.
Finally, most of the high-end talents of FPGAs are concentrated in North America, and the lack of domestic talents is also a major problem.
However, it is more important to pay attention to the rapid progress of domestic FPGAs. Because since 2017, domestic FPGAs have officially entered a critical stage of development (from reverse design to forward design), and have gradually begun to be recognized by domestic customers.
In recent years, with the advent of opportunities for domestic substitution, domestic FPGAs have made great progress. According to public information, Fudan Microelectronics launched a 100 million-door FPGA product with a 28nm process in the second quarter of 2018, and then officially sold in 2019, and has now opened the research and development process of 1 billion door-level FPGA products with a 14/16nm process, and it is expected to carry out product tape-out in 2021-2022 and achieve mass production in 2023. Unison released tens of millions of FPGA products with 28nm process in early 2020, and Anlu Technology also launched FPGA products with 28nm process in 2020.
In view of the fact that domestic FPGA companies have accumulated in related fields for a long time and have made substantial breakthroughs in some key areas, JW Insights believes that domestic manufacturers should not blindly pursue the adoption of advanced processes, but should pay more attention to the specific needs of customers, and form differentiated designs with international manufacturers on some key indicators, such as optimizing the core architecture, integrating some proprietary IP, or developing a more cost-effective packaging form.
At the same time, domestic FPGAs should further increase investment in market segments, and unite more industrial chain partners to improve the construction of the ecological environment, so as to seize the opportunities of emerging markets and obtain stronger competitiveness. (Proofreading/Andrew)