IC design industry: the future still needs to focus on improving internal strength

"In the next five years, the problems faced by the IC design industry will continue to grow bigger and stronger. And being stronger will inevitably be achieved to a certain extent. The expansion of expansion is an extension of expansion, and growth is the growth of connotation. Today's industry chain The cooperation model is evolving toward the virtual integration mode. The foundry is also gradually adopting the strength of some capital and based on the common values ​​of the upstream and downstream, it is gradually forming the IDM of the super IDM." - Wei Shaojun, Vice Chairman of IC Design Branch of China Semiconductor Industry Association

This year, China's IC design industry has performed very well. It can be said that this is a year in which the rapid development has been rare in recent years. Last year, the income of China's IC design industry was 34.5 billion yuan, which was calculated at a ratio of 110% to reach 37.9 billion yuan. This year, the industry-wide revenue is expected to reach 50.2 billion yuan, which will reach 55.2 billion yuan at a ratio of 110%, a year-on-year increase. 45%. The reasons for such high double-digit growth are: First, the global IC market has bottomed out. This is mainly reflected in two aspects: On the one hand, the global financial crisis caused the global design industry to shrink in 2009, while China achieved a growth rate of 14.8% on a year-on-year basis. It is the only IC market in the world that maintains growth, creating a very high speed for this year. Good conditions; On the other hand, from the perspective of IC buyers, in order to fill inventory and expand channels, they have increased their procurement volume, which has led to rapid growth in the IC industry. The second is that some new products, such as the Apple iPad, entered the market, prompting the rapid emergence of similar products, which has a great effect on IC demand. Domestic IC design companies grasped fast and followed tightly. A large proportion of emerging products were produced by domestic IC design manufacturers. This also indicated that the industry as a whole has made great progress.

Showing three major characteristics

This year's domestic IC design industry also presents several major features that are different from the past: First, the proportion of high-end IC products is increasing. In the past, domestic IC products were mainly concentrated in the relatively low-end areas such as SIM cards, power management, and MP3 multimedia processing. This year, domestic manufacturers have made significant progress in high-end areas such as mobile communications, digital TV, and electronic payment, such as Spreadtrum. , Beijing Junzheng Microelectronics, Fuzhou Ruixin, Hangzhou National Core, National Technology, etc., the market share has further increased. Second, some progress has also been made in the blank areas of domestic ICs. In the CPU market, the "Tianhe-1" supercomputer uses a CPU chip developed by domestic manufacturers. In the memory market, Shandong Huaxin acquired Qimonda, has successfully developed DRAM products, and its storage capacity reaches the mainstream 2G level. In the field of embedded CPUs, the authorized companies such as Suzhou Guoxin and Hangzhou Zhongtian have accumulated more than 100 million, and will achieve faster development in the future. Third, the scale of the industry continues to rise. This year, the annual sales of 80 companies are expected to exceed 100 million yuan, while only two companies exceeded 100 million yuan 10 years ago. It is believed that the threshold for the top 10 IC design companies this year will be no less than 1 billion yuan. yuan.

2010 is the year of the "Eleventh Five-Year Plan". From the perspective of the development of China's IC industry in the past five years, we can conclude the following experience: First, the threshold of IC design industry is relatively high. It is necessary to play steadily and overcome impetuous mentality. We have seen that companies that have performed successfully in the market have only gradually grown up after a long period of time. The idea of ​​making money next year this year is unrealistic. Second, competition is shifting from low-end products to high-end products. To achieve breakthroughs in the high-end product market, we must focus on the following points: First, we should seize the mainstream products that are widely available, that is, seize the main battlefield; It is necessary to form its own characteristics and to make it deep. The development of companies such as Spreadtrum, Huaxin, and Gecom Microelectronics proves its importance. Third, we must do our best within the development process, and we must follow our own development laws. Should first solve the problem of survival, and then seek development; Fourth, the company must have its own core competitiveness, not a chip designed, can be assembled in the product can be successful, there must be other people can not replicate the core competitiveness is possible For a long time, this is particularly evident in companies that have grown faster.

Combine with the application to find the point of convergence

Of course, the domestic IC design industry still faces some deficiencies. At present, China's IC self-sufficiency rate is still relatively low, mainly reflected in high-end products, such as CPU, memory, DSP (digital signal processor), FPGA (Field Programmable Gate Array), etc., the imports of these major categories of products accounted for the total IC About 60% of the import amount, which is a big difference compared with foreign countries. Before the emergence of alternative new technologies, domestic IC companies can hardly go beyond foreign chip giants. The chip is a global market. On the one hand, China's IC design companies must set their sights on the global market. On the other hand, they must better integrate with China's domestic applications and tap into China's potential market and specialty market. For example, in the recent hot seven strategic emerging industries, most of these industries need IC support and foundation, which will bring great room for IC industry growth, but at the same time IC companies also face some new challenges. Because the business model, development model, and application environment of strategic emerging industries and traditional industries are very different, many new requirements have been put forward for IC companies. At the same time, the application of strategic emerging industries will form its own characteristics, the country has also done a lot of support and paving work, the market is slowly nurturing, it will take some time to establish the direction, the need for IC companies to put aside, more to go with the application In combination, find a fit point.

A major bottleneck in the development of China's IC design industry is the lack of domestic OEM capacity. From the global background, the global IC industry is recovering, and the demand is growing. The size of the foundry cannot support such large production capacity, resulting in insufficient production capacity. In addition, the proportion of domestic IC design companies' products in the foundry is not high, so the relationship between domestic IC design companies and foundries also needs to be adjusted. First, the phenomenon of tight production capacity in the next few years will intensify, foreign IDM (integrated device manufacturers) giants such as Freescale, NXP, Infineon, etc. are gradually turning to the Fabless or Fab-lite, and their output value together With huge amounts of US$34 billion, the demand for production capacity is huge. Second, the IC design industry can not be freed from production capacity. It can only look for domestic foundries when there is no capacity. When there is production capacity, it does not look for domestic foundries. Even with production capacity, it can still face spurious deficiencies. IC design companies It is necessary for both parties to make common progress in order to closely integrate with foundries and increase cooperation. On the one hand, the process of the foundry must continue to progress, and the IP core and design environment must be improved. On the other hand, the IC design industry must improve its design capabilities and form a mutually beneficial strategic partnership with the foundry.

Now that the cooperation model of the industry chain is evolving toward the virtual integration model, the foundry is gradually forming IDM that exceeds IDM through the power of some capitals and based on the common values ​​of the upstream and downstream. TSMC is more typical. They invest in creative microelectronics and integrate capital with packaging plants. From the very beginning, they can help IC design companies from design to manufacturing to testing to final packaging. This is the future direction of development. Recently, SMIC also announced that it will invest in a Shanghai-based ASIC (application-specific integrated circuit) design and Turnkey (turnkey) service company, Can Semiconductor, to strengthen design support, which is also beneficial to the industry chain. Only by combining strengths and strengths, can they be warmed up.

Lack of internal power is still the main problem

In the next five years, the problems facing the IC design industry will still be bigger and stronger. We are not big enough at present, and the overall income is less than the annual income of a company of Qualcomm, and it is inevitable that a stronger one will be achieved to a certain extent. Bigger growth is an extension, and stronger growth is a connotation.

The problems in China's IC design industry are mainly due to insufficient internal resources. They rely heavily on external resources such as design service companies, EDA (electronic design automation) suppliers, and advances in process technology. This can be done at the start-up stage of the company, but if it develops to a certain extent, it will not work if its own capability does not increase. For example, there is a company that uses 65nm technology to develop products that are not as good as 130nm technologies developed by another company. This reminds us that resources are supplementary and that the improvement of our own capabilities is the most important.

Combining with the process is also an issue that can not be solved by IC design companies. We know too little about the process. Today, the process is moving towards 40nm and 32nm. The design of the chip will be more complicated, and the combination of process and design will become very important. IC design is needed. The company attaches importance to the combination of technology. Foreign companies rarely rely on standard cell libraries, most use COT (customer-owned tools). This requires companies to have a good understanding of the process, and generally IC products do with COT, the performance will increase a lot, which is also the operating costs of foreign companies The reason for the high gross profit margin is that domestic IC companies must improve their competitiveness. Breakthroughs in this area are critical.