JW Insights believes:
●When Promoting IDM, China focuses on the four dimensions of history, products, applications and industries, and has no limitations or limits, and has the courage to explore and make breakthroughs.
CIDM (Commune Integrated Device Manufacture) is an IDM of industrial synergy and integration. For domestic semiconductors, the design forces of many excellent design companies in the United Nations can cooperate with downstream semiconductor manufacturing and terminal links to jointly develop high-end chip products with high technical thresholds and strong competitiveness.
● With the continuous advancement of technology, when it comes to 1 nanometer or below process, there may be only one player, and the customer base of advanced technology will become less and less, so the opportunity for IDM is very large.
● High-end applications have extremely high performance requirements for chip products, and from product design, manufacturing, etc., they tend to only dock with one company, which requires IDM models.
China's IDM (Integrated Device Manufacture, integrated device manufacturing) has begun to exert force, according to the "China Top 100 Semiconductor Enterprises (2021)" data show that the semiconductor top 100 IDM companies accounted for 11, of which 4 entered the top ten. Under the current industrial background and international situation, how China exerts its power on IDM is a topic worth discussing. This episode of JW Insights will revolve around this topic.
First, let's sort out the entire development process of global semiconductors. Semiconductor companies in the 50s and 60s of the last century were almost all IDM models, that is, chip design, manufacturing, packaging and testing as one. At that time, some IDM companies also included downstream electronic terminals, such as Samsung, Toshiba, and Siemens (later the semiconductor division was spun off to form Infineon), Philips (NXP was spun off from Philips), and did semiconductors while also doing terminal products such as home appliances and computers.
In the 1970s, some innovative semiconductor design companies began to appear in the industry, and some IDM companies began to work for these semiconductor design companies while focusing on their own business.
By the 1980s, with the increasing number of innovative design companies, a model of independent oem was slowly developed. As a result, independent chip design companies, chip manufacturing companies, and chip packaging and testing companies have emerged one after another, and various links of semiconductors have appeared in a discrete mode, and TSMC was born in this context. At the same time, the IDM model also continues to exist, and unlike the early stage of the industry, most of the IDM companies in this period no longer contain electronic terminals, and only involve the design, manufacture and packaging of semiconductors, such as Infineon spun off from Siemens and NXP from Philips.
At present, the international representative IDM companies include Intel, Texas Instruments, Infineon, Micron in the United States, Samsung and Hynix in South Korea, NXP and STMicroelectronics in Europe, and so on.
As can be seen from the table below, in the top ten semiconductors in the world in 2021, IDM companies occupy 5 seats, which shows the vitality of the IDM model.
Let's take a closer look at the situation of major international IDM companies and major domestic IDM companies.
As can be seen from the table, whether from the time of establishment or from the perspective of revenue scale, domestic IDM companies are still quite a distance away from the strength of foreign IDM companies, and they are almost not a physical opponent.
The development of foreign IDM giants to today's scale, not only thousands of people and tens of thousands of people ranging from R & D teams, but also decades of technology accumulation, as well as mergers and acquisitions and other market behaviors, has developed into today's strength. For China's semiconductor companies, only rely on time to make technological breakthroughs and accumulation, the time cost is too high, but the current strength and international environment is not enough to carry out corporate mergers and acquisitions, so how to go?
China's development of IDM requires different dimensions to consider:
First, from the historical dimension, the IDM model is one of the mainstream directions of the semiconductor industry, and it is also the breakthrough road of China's core. Advanced processes are mainly from the needs of mobile phones, AIoT, HPC and other fields, and only TSMC and Samsung can currently achieve 5 nanometers. With the continuous advancement of technology, when it comes to 1 nanometer or less process, there may be only one player, and the customer base of advanced technology will become less and less, so the opportunity for IDM is very large. In addition, in the development process of TSMC, the mature process of 28 nanometers is the most profitable production line of TSMC.
With such an industrial historical view, there is more confidence and consensus for the development of domestic IDM enterprises.
Second, from the perspective of product dimension, the first is the storage product, and the storage should be promoted through IDM from beginning to end. Samsung, Micron, Hynix three major storage giants are IDM model, the current two major domestic storage enterprises Yangtze River Storage, Changxin Storage is already an IDM model, as long as the domestic continues to promote this path, China's storage industry must have a day to raise their eyebrows. Secondly, digital analog products, such as automotive electronics, aerospace and other fields of product performance requirements are extremely high, the power consumption requirements are not as high as digital chips, to do high-end digital analog products, IDM mode is a breakthrough. With the emerging rise of artificial intelligence, Internet of Things, automatic driving, 5G and other application fields, it helps the development of logic chips, and there are currently few domestic IDMs, which means that the development space is very broad.
Third, from the perspective of application, the domestic electric vehicle market, aerospace, new energy, state grid, photovoltaic solar energy, etc., will be a huge market driver, which are the use of high-end semiconductor products. These areas have extremely high requirements for the performance of chip products, and from product design and manufacturing, they tend to only dock with one company, which requires IDM models.
To this end, to win these strong domestic markets, China needs to build first-class and high-end IDM companies.
Fourth, from the perspective of industry, China's semiconductor industry urgently needs to cultivate bigger and stronger enterprises, and the IDM model is timely. IDM has very high requirements for the design team, and the cost of investing in building a factory is also very large, so it is very difficult for a domestic chip design company to turn to IDM development. To this end, it is advisable to break the traditional thinking and make breakthrough innovations.
From an international point of view, taking Intel as an example, last year proposed IDM2.0, carried out bold innovation, insisted that its own factory did not oppose the use of external factories, and also opened up the foundry business. Intel's move not only broke the ceiling for itself, but also created a paradigm for the industry.
At the same time, there are also some attempts at home. For example, Qingdao Xinen is different from the traditional IDM, but has carried out innovative integration, that is, CIDM, inviting the global analog and digital-analog hybrid chip design team to join the joint establishment of IDM company; and with the packaging and testing, raw materials, terminals and equipment manufacturing enterprises jointly to provide high-end chips through customized development, and then replace foreign imports.
For domestic semiconductors, if there is no international design resources, the design forces of many excellent design companies in the United Nations can cooperate with downstream semiconductor manufacturing and terminal links to jointly develop high-end chip products with high technical thresholds and strong competitiveness.
When Promoting IDM, China focuses on the above four dimensions, does not limit or set limits, and has the courage to explore and make breakthroughs. (Proofreading/No Sword Core)