Written by / Qian Yaguang
Editor/ Zhang Nan
Design / Zhao Haoran
With the development of the four automobiles represented by electrification and intelligence, automotive chips and power batteries have begun to become the new focus of competition for core technologies in the global automotive industry.
The latest data released by the American Semiconductor Industry Association (SIA) shows that 1.15 trillion chips were sold worldwide in 2021, and sales reached a record $555.9 billion, an increase of 26% year-on-year. Among them, sales of automotive ICs increased by 34.3% year-on-year to US$26.4 billion.
As the birthplace of the global semiconductor chip integrated circuit, the United States' achievements in the chip field are mainly concentrated in the field of chip research and development and design, and the proportion of local manufacturing in the field of chip production has fallen sharply in the world. Due to the high cost of manpower in the United States, the high-end process chip process is not up to standard, and the high-end chips of companies such as Qualcomm, Apple, And Intel have been handed over to Samsung in South Korea and TSMC in Taiwan to complete.
According to Research and Markets research data, the global lithium-ion battery market is worth about $40.5 billion in 2020, of which power lithium batteries account for the main production share, reaching 70.8%.
In the field of power batteries, the United States has an advantage in research and development, resources, trade and financing, but the local battery supply chain is relatively weak. The U.S. Department of Energy's Battery Supply Chain Assessment found that currently, the U.S. has a global market share of less than 10 percent in terms of manufacturing capacity for all major battery components and battery manufacturing.
The automotive industry has shifted to electrification, intelligence, and networking, and the United States has lagged behind in the development and supply chain of new core technologies such as chips and power batteries, and is starting from legislation, strategy, and enterprise cooperation, using various means to regain the leading position.
On March 28, EST, the U.S. Senate passed the America COMPETES Act of 2022 with 68 votes in favor and 28 votes against, aiming to provide more funding for U.S. scientific research and the semiconductor industry. Its main contents include large-scale investment aimed at promoting semiconductor manufacturing in the United States.
These include about $52 billion in grants and subsidies to the semiconductor industry, and $45 billion in supply chains for high-tech products in an attempt to "better compete with China" globally.
China has been seen as a strong rival by the United States since 2010, when China's GDP was $5.78 trillion, and the total U.S. GDP reached $14.99 trillion, compared with 39.42 percent of the United States.
Peng Xiaoguang's article "Sino-US Relations Toward Qualitative Change" published in the 10th issue of Global Finance and Economics in 2010 pointed out that the reason for judging Sino-US relations to "move toward qualitative change" is that based on the possibility that in the next 10-15 years, only China in the world will have the possibility of surpassing the total economic scale of the United States (although China will still be a developing country and its comprehensive national strength will be weaker than that of the United States), and China is still an independent political and military power; the second reason is that locking in the "number one challenger to hegemony" is the instinct of all hegemonic countries in the history of human society. The United States is no exception, and the target of the United States is almost only China, which is chasing itself.
In 2021, the total GDP of the mainland will be 114.3 trillion yuan, about 17.72 trillion US dollars, which has reached 77% of the 23.03 trillion US dollars in the United States, and the growth rate is far faster than that of the United States. Therefore, it is not surprising that the United States is taking various measures to curb China's development.
US President Biden stressed: "We must take advantage of the recent 'lack of core tide' to increase investment in the semiconductor industry and win the semiconductor competition with China." ”
In addition to introducing the bill, the United States is also trying to establish a chip alliance against China to curb the development of China's chip industry.
Reject China's chip alliance
The chip industry has a deep and wide industrial chain, and the United States occupies an important position in the upper and middle reaches of it, but it cannot completely monopolize the chip industry chain.
At present, the globalization of the chip industry is the most obvious, and the entire industrial chain is distributed around the world, and the division of labor is clear. The value of the industrial chain is increasingly flowing downstream, and the research and development costs of the manufacturing link account for 25% of the whole chain, while the value output accounts for 45% of the whole chain.
Source: BCG, SIA▼
And 75% of the world's chip manufacturing capacity is concentrated in East Asia, and this proportion is still increasing rapidly, Chinese mainland chip manufacturing industry is making extremely rapid progress, although the process is not advanced enough, but in 2021 the chip production capacity share has reached 15%, of which the chip production capacity of local manufacturers in the mainland, accounting for only about 8%, the other 7% of the production capacity comes from foreign companies set up branches in the mainland. Chip factories in the United States account for only 12% of the world's production capacity.
According to the Global Fab Forecast Report released by the International Semiconductor Industry Association (SEMI) in June 2021, 29 new chip factories will be built worldwide in the next two years, of which 19 in 2021 and 10 in 2022. Among them Chinese mainland will build 16 new chip factories; the Americas have plans to build 6 new chip factories; Europe and the Middle East have a total of 3, and Japan and South Korea have 2 each.
In addition to the rapid growth of production capacity, the size of China's semiconductor market is also rising rapidly.
According to a study by IC Insights, a well-known semiconductor market research organization, China has been steadily increasing since it became the world's largest IC market in 2005. In 2021, China became the world's largest regional market with $192.5 billion in semiconductor sales, accounting for 34.6%; year-on-year growth was 27.1%, second only to the United States (27.4%) and Europe (27.3%).
In addition, according to Ye Tianchun, chairman of the Integrated Circuit Branch of the China Semiconductor Industry Association, in the top ten wafer manufacturing enterprises in Chinese mainland from 2016 to 2020, the overall proportion of sales revenue of domestic enterprises decreased from 44% to 27.7%, while the remaining share was contributed by foreign and Taiwanese companies.
It can be seen that although China's technology in the semiconductor industry is not the most advanced, it has a large production capacity, fast growth, and the scale of the product market also ranks first in the world, and it is very closely related to major semiconductor giants. Therefore, the United States must make full use of its industry influence while it is still in its hands to slow down the pace of China's development.
According to a report by the South Korean media "Seoul Economy" on March 28, the US government proposed to form a "Chip 4 alliance" with South Korea, Japan and Taiwan, and the intention behind it is to use this organization to exclude Chinese mainland from the global semiconductor supply chain.
The "Chip 4" alliance invited the top chip companies in the entire Asian region, including Samsung and SK Hynix in South Korea, Toshiba, Renesas and Tokyo Electronics in Japan, Applied Materials, Intel, Qualcomm, Micron, Broadcom and other companies in the United States. From design, manufacturing to packaging and testing, covering the entire chain of the chip industry, including chip design companies, raw material consumables companies, as well as foundry capacity and packaging and testing companies, but there is no invitation to Chinese mainland chip companies, to exclude China from the global chip supply chain.
In the view of the United States, if we can unite South Korea, the world's largest wafer foundry company, TSMC, which has a world-class level in the chip field, and Japan, which has a strong sense of semiconductor materials, components, and equipment technology, it will build a "semiconductor barrier" that surrounds China.
For those well-known semiconductor companies, the proposal of the "Chip 4" in the United States will become an extremely difficult choice - if the factory in China is closed, its own production capacity is bound to be greatly reduced, and the market will be ceded to the opponent in vain; if the Chinese factory is not closed, and the new factory is also opened in the United States, there may be overcapacity and wasteful investment.
In the case of South Korea, China is a very important market for Korean semiconductor companies, Samsung established a joint venture as early as 1993; SK Hynix also set up a memory chip factory in Wuxi in 2004, and its products account for an important share of the global market. Therefore, it may be difficult for the South Korean government and enterprises to accept the US proposal. "Asia Daily" said that the "Chip 4 Alliance" proposed by the United States will place a heavy burden on the South Korean government and semiconductor companies.
According to Taiwan's "Economic Daily" report, a Taiwan factory privately revealed that the "Chip 4" alliance is quite difficult to establish, coupled with the "competition and cooperation" relationship, it is not easy to closely alliance, it is expected that the main purpose of the United States should be from the equipment and EDA tools to clamp Chinese mainland the development of the semiconductor industry.
In addition, TSMC established TSMC (Shanghai) Corporation in 2002 and began to build a factory; in March 2016, TSMC announced that it had signed an investment agreement with the Nanjing Municipal Government to invest $3 billion in TSMC (Nanjing) Co., Ltd. UMC established Hejian Technology (Suzhou) Co., Ltd. in 2001, and in 2014, UMC and Fujian Electronics Group jointly funded the establishment of Xiamen Lianxin.
Even for chip companies in the United States, the "Chip 4" alliance is not a good thing. For example, Intel, as early as January 1994, established Intel (China) Co., Ltd., china's revenue accounted for 26.75% in 2021, is its largest source of revenue, and 50% of microprocessors are packaged and tested in Chengdu. Qualcomm, for example, has more than 50% of its total global revenue in China every year. Abandoning the Chinese market and halving revenue at once is probably also unlikely.
Once this so-called alliance is established and suppressed Chinese mainland, it may trigger reverse sanctions from the Chinese mainland, which will cause a serious blow to the members of the alliance, and related doubts also make chip companies jealous of joining the "Chip 4" alliance.
Coercion of chip companies to hand over core data
In addition to suppressing the development of China's chip industry, the United States has also put forward unreasonable requirements for the core technology and data of chip companies in other countries. On September 25, 2021, in the name of "stabilizing the chip supply chain", the US government required more than 20 chip-related companies, including TSMC and Samsung, to "voluntarily submit" trade secret data for 45 days.
With production information, order inventory and other customer information, the United States knows who in the world wants the most chips, the price, and even the pace of new products and new technology development of non-American chip companies.
In order to ensure that this "data extortion" can end perfectly, the United States will not hesitate to use the state apparatus, and US Commerce Secretary Gina Raimondo has publicly stated that there is a way to let them hand it over.
On November 7, 23 companies have submitted their files, including Samsung, TSMC, UMC, Global Crystal, etc., and most of the public opinions are filled in according to the US form, and the blank part is reserved for the US side to refer to the confidential documents, saying that it has been explained in the confidential documents.
On November 8, Gina Raimondo said that all semiconductor companies have promised to submit chip data to the United States, so it seems that there is no need to use the National Defense and Security Act.
South Korea's Seoul Economy reported that although the US government announced the data analysis results submitted by 150 semiconductor manufacturers in November last year on January 25 this year, it only showed that the new crown epidemic had led to a significant increase in global chip demand, and the average chip inventory fell from 40 days in 2019 to less than 5 days, and did not come up with any countermeasures to solve the imbalance in the global semiconductor supply chain. The U.S. government's approach is questionable.
Strong digging chip senior talents
Chips belong to high-end technology, if you want to achieve development and progress, technology, funds, talents are indispensable. Therefore, since the landing of the 52 billion chip law in the United States, the United States has set its sights on talents, especially overseas talents.
In mid-March, the US think tank CSET said that once the bill is implemented in the future, new semiconductor fabs in the United States may need to employ about 27,000 employees, which may come from other industries, academic institutions and overseas talents, and the current US high-end talent reserve may be seriously insufficient.
Although academic institutions can meet the needs of semiconductor talents to a certain extent, they must undergo a lot of on-the-job training, plus about 67% of master's degree students and 48% of semiconductor students in the United States are foreign students, and it is difficult to fully meet the needs.
CSET estimates that the U.S. semiconductor industry has a large overseas talent gap of more than 3,500 in total, and said that these high-end talents are preferably within the employees of leading logic chip manufacturers such as TSMC and Samsung.
Any industry that wants to cultivate high-tech personnel cannot afford to invest a lot of time and money. Especially in the chip foundry industry, senior talents who master chip manufacturing technology have always been in short supply. The poaching of core technical personnel of TSMC, Samsung and other enterprises will indirectly affect the research and development progress of these enterprises in the field of advanced processes, thereby weakening the competitiveness of their technologies.
Insist on sharing the core technology of the battery
In addition to the semiconductor industry, in another important area of the automotive industry - power batteries, the United States is also competing through unfair means.
The United States is catching up with the electrification of China and Europe from the aspects of policy, capital, technology, market, supply chain, etc., increasing support for the local power battery industry, and establishing manufacturing capabilities in multiple links in the lithium battery industry chain.
In the competition of the global lithium battery industry, the advantages of the United States are mainly reflected in the market leadership of automakers and battery companies, skilled labor, R & D innovation, natural resources, trading partners and financing advantages. The local lithium battery supply chain is relatively weak, including major raw materials such as cobalt, lithium and nickel, which rely on imports, resulting in obvious shortcomings in the development and construction of its local power battery industry.
In addition, disputes such as the spread of the new crown epidemic and the Conflict between Russia and Ukraine will also have a great impact on the mining and supply of key raw materials such as cobalt and nickel, and will also hinder the development of the US power battery industry.
In June 2021, The Federal Consortium for Advanced Batteries (hereinafter referred to as FCAB), which was jointly formed by the U.S. Department of Energy, the Department of Defense, the Department of Commerce, and the State Department, released the "National Blueprint for Lithium Batteries in the United States (2021-2030)", which is the first government-led development policy for lithium batteries in the United States.
The content mainly includes ensuring the safety of battery raw material supply, finding alternatives to sensitive raw materials; building the processing capacity of lithium battery raw materials in the United States; stimulating the production capacity of precursors, batteries and battery packs such as positive and negative electrode materials in the United States; taking the lead in establishing industrial capabilities for waste battery recycling and material recycling in the United States; and maintaining the leading edge of the United States in battery technology research and development.
On August 6, 2021, U.S. President Joe Biden signed a new executive order that clearly states that key components such as batteries and semiconductors needed to manufacture new energy vehicles must be made in the United States.
Panasonic, LG New Energy, SK on, Samsung SDI and other Japanese and Korean battery companies, in response to the call of the US government, locked the battery orders of the main engine factory in advance by binding the joint venture of local car companies to provide guarantees for their battery capacity expansion and performance growth in North America.
However, in order to control the core technology of power batteries as soon as possible, American auto companies do not hesitate to blackmail partners.
On March 28, South Korea's "East Asia Daily" reported that according to the news from the relevant departments and enterprises of the South Korean government, the three major battery manufacturers in South Korea were required to "share core technology information" in the process of investing in the United States.
On January 26, LG Energy Solution and General Motors decided to build a third battery plant in the United States, Nikkei Asia said. However, at the time of negotiations between the two sides, GM directly demanded that LG Energy Solutions hand over experimental data related to battery output directly related to stability on the grounds of ensuring battery safety.
Tracing experimental data may reveal critical knowledge and techniques related to battery design and manufacturing. One battery expert said, "Even a small amount of information can be of great help to automakers."
In addition, When Ford of the United States negotiated a battery joint venture plan with SK On, a battery manufacturer of south Korea's SK Group, it also asked for the sharing of battery density related technologies.
During the negotiation process, when SK On was told that it was difficult to share the battery design, manufacturing and evaluation technology designated as the national core technology by South Korea's Industrial Technology Protection Law, Ford even directly visited the South Korean Ministry of Industry, Resources and Trade last September to confirm whether there was a legal basis for the South Korean company's claims.
According to the current South Korea Industrial Technology Protection Law, if the relevant core technology is leaked, it can be sentenced to more than 3 years in prison and a fine of up to 1.5 billion won (about 776,700 yuan). In August this year, South Korea will implement the Act on Special Measures related to strengthening and protecting the competitiveness of the country's cutting-edge strategic industries, and it is expected that technologies in the semiconductor field will be significantly listed as national core technologies.
The United States in the process of automobile electrification, has been lagging behind China, The European market, in the battery application technology is not as good as China, Japan and South Korea, GM, Ford and other automakers the ultimate goal is to achieve self-sufficiency of car batteries, and cooperation with foreign battery companies is only the intermediate stage to achieve the goal. If the coercion of Korean companies to share technology is successful, it may break the existing ecological balance and have a great impact on the automotive industry pattern in Europe, the United States and the Asia-Pacific region.
This unscrupulous means of competition has made many battery companies worry about investing in factories in the United States.
This article was originally produced by Automotive Business Review
For reprint or content cooperation, please contact the instructions
Illegal reprints must be investigated
Scan the code to join the reader's WeChat group
Communicate about cars
CO to gasoline, electric car terminator?