The chip industry's financing surged in the first quarter Technology giants accelerated their entry to compete for resources and talents

Despite fluctuations in downstream demand, the investment and financing sentiment of the semiconductor industry is still at a high level.

On April 7, the first financial reporter learned from the enterprise check that the total amount of financing disclosed by the mainland chip semiconductor track in 2021 exceeded 387.6 billion yuan, far exceeding the 109.769 billion yuan in 2020. The latest data show that in the first three months of 2022, the market financing incidents have reached a total of 310, which is 4.6 times that of the same period in 2021, and the total amount of disclosed financing has exceeded 35 billion yuan.

In the view of the institution, in addition to the business expansion of traditional chip manufacturers, the entry of technology giants including mobile phones, computers, home appliances, and the Internet has also raised the investment boom in China's semiconductor industry.

According to the second quarter update of the 2022 Maclean Report by semiconductor analyst IC Insights, the share of formula semiconductor manufacturers including Chinese mainland has reached 9%, ranking third in the world.

"From smart phones, personal computers to the IoT field, technology giants have invested a considerable amount of money into the chip track in recent years, in addition to the uniqueness and differences of the previous products, they also hope to reduce their long-term dependence on chip factories through self-developed chips, strengthen their product development capabilities, and increase chip talent reserves." Counterpoint research analyst William Li told reporters.

Tech giants are pouring into the chip track

In 2022, the amount of investment and financing in the chip track is expected to break the historical record.

According to enterprise investigation data, since 2011, there have been 3971 investment and financing incidents in the mainland chip semiconductor track, and the total amount of disclosed financing has exceeded trillion yuan, and in 2021 alone, the investment and financing incidents have reached 492. In the first quarter of this year, the number of financing increased significantly year-on-year, close to five times the level of the same period.

Among them, technology giants have joined the "core- making" army, and the accelerated influx of funds is one of the important reasons for the increase in financing amount.

According to incomplete statistics, Huawei's Hubble Investment has invested in more than 70 chip semiconductor companies in the past three years, covering the chip manufacturing industry chain, chip software industry chain, automotive electronics, and 5G industry chain. Last year, it frequently shot in the field of semiconductor materials, winning the laser lithography technology service provider Beijing Keyi Hongyuan Optoelectronic Technology and the packaging chip tester "Jiefeng Test" and other enterprises.

Also in July last year, Shanghai Zhijian Core Semiconductor Technology Co., Ltd. underwent industrial and commercial changes, adding Beijing Kuxun Technology Co., Ltd., an affiliate of Meituan, as a shareholder. In the same month, according to the official micro disclosure of China Mobile Chip, Xinsheng Technology Co., Ltd., a wholly-owned subsidiary of China Mobile's China Mobile Internet of Things, officially operated independently in July 2021, further entering the field of Internet of Things chips and planning to be listed on the Science and Technology Innovation Board.

Lenovo also stepped up efforts to expand its chip investment territory last year. The reporter noted that from the end of December 2021 to the end of January 2022, Lenovo, with Lenovo (Beijing) Co., Ltd. as the main body, has intensively invested in a number of semiconductor companies, including chip manufacturing companies Shenzhen Yixin Information Technology Co., Ltd., Dongguan Memory Storage Technology Co., Ltd., and Cambrian Xingge. On January 26 this year, Lenovo established Dingdao Zhixin in Shanghai, with a registered capital of 300 million yuan, wholly owned by Lenovo (Shanghai) Co., Ltd., and its business scope is roughly the design and sales of integrated circuits.

In the case of layoffs and recruitment of Internet companies, chip talents are sought after on recruitment websites.

Taking Dingdao Zhixin as an example, the reporter consulted the relevant information of Liepin, and the recruitment direction included architecture, DFT, AI, software, IC design and other talents, of which the starting salary of digital back-end engineers was above 70K. Website recruiters said that the current scale of the chip company is 150 people, mainly based on research and development personnel, and plans to expand to about 500 people next year.

Talent solutions company Hudson released the "2022 Talent Trend Report" at the beginning of this year, which shows that the chip industry will have the first salary increase in 2022, more than 50%, followed by medical and big health with a 35% increase.

Lack of core tide and technology window to drive self-developed chip investment

If technology manufacturers want to make better products, chip self-development is a necessary way, although the investment is huge, but in the industry, gradually become a consensus.

Taking the mobile phone industry as an example, the four major domestic mobile phone manufacturers have all assembled the chip track.

On December 14, 2021, OPPO released its first self-developed chip "Mariana MariSilicon X", and previously, Huawei HiSilicon's Kirin, Vivo's V1 image chip and Xiaomi's surging P1 were all regarded as important achievements of mobile phone manufacturers entering the chip track.

In notebooks, TVs and other terminal products, the layout chip track has gradually become a new trend. According to the data provided by Wisdom Bud, Lenovo and its affiliates currently have more than 690 patents applicable to the chip field, of which more than 430 invention patents are authorized, accounting for about 63% of the total, and the patent layout is mainly concentrated in security chips, control chips, memory modules, data processing and other related fields.

Home appliance manufacturers such as Midea, TCL and Gree are also investing in chip products through different paths.

A research and development person from a home appliance company told reporters that companies that make products will pursue the ultimate cost performance at a certain stage of development, so it has become an inevitable development trend to go deep into the supply chain to find opportunities. In particular, at present, home appliance companies have embarked on the road of intelligent transformation, completely relying on the existing market can not meet the product intelligence and the individual needs of users.

The same is true for PC manufacturers. In the PC field, the current chip is still based on the Intel x86 system, especially in the field of desktop computers. "However, in recent years, due to the trend brought by the M1 chip, manufacturers willing to invest in the ARM camp to develop PC chips have also taken advantage of the rise, so in the medium and long term (3-5 years) there is an opportunity to see the growth of ARM's market share, at least in notebook computers to obtain a considerable market share." William Li told reporters that the PC market is a very mature field, want to stand out in such a market, in addition to the entire product ecosystem and app support, is the uniqueness and difference of the product, therefore, PC factories in recent years to expand the recruitment of chip talent in addition to the independent development of new practical functions and the creation of differences and uniqueness, but also plans to increase the connection with their own other products, improve the product ecosystem.

"However, due to the relatively high cost of investment in chip manufacturing, not only the capital consumption is high, the time is long, and it is almost difficult to recover the input cost, so the existing technology manufacturers tend to invest capital in the field of IC design, which can create more product added value." William Li said.

In addition to seeking technological differentiation, in the view of institutions, increasing investment in chip technology and the scramble for chip talents are expected to help technology companies "hedge" the uncertainty brought about by the lack of cores in the future.

According to data released by a research agency under Susquehanna, the global chip delivery time increased by 3 days month-on-month to 26.2 weeks in February, and buyers waited for more than half a year on average. It was the agency's longest record since it began tracking the data in 2017.

According to the Haina Research Report, the chip shortage shows obvious structural characteristics. Among them, the MCU shortage is the most serious, with a delivery time of 35.7 weeks (more than 8 months) in February. It was followed by power management ICs, which had a 1.5 week lead time extension in February.

"Now the practice of enterprises is usually to lock in the production capacity of the next year in advance, and in the past, it was judged by demand." Xia Guigen, a senior strategic consultant in the integrated circuit industry, told reporters that in the next year, the global supply chain will still be "fragile", and the change in the order mode will also bring more uncertainties to the current chip shortage.