1. Memory prices turn from rising to falling, major manufacturers delay capacity expansion plans
The prices of DRAM and NAND Flash, the two main products of general-purpose memory, showed a trend of rising and falling in 2018. According to a comprehensive report by Jibang Consulting, the global NAND Flash market was affected by the traditional off-season in the first quarter of 2018, resulting in oversupply and a loosening of sales unit prices. In the second quarter, there was a decline of 15% to 20%, and it is expected that the decline will be difficult to stop in the first half of 2019, with a continued decline of 10% in the first quarter. The situation of DRAM is relatively good, with a price reversal occurring in the fourth quarter of 2018, with an average selling price drop of 8%. It is expected that the decline will further expand in the first quarter of 2019.
Comment: The prosperity of the semiconductor industry, which has continued since 2017, is largely due to the rising prices of memory devices. As both DRAM and NAND Flash turn from rising to falling, the current silicon cycle will also enter a downward phase. It can be foreseen that in the coming period, industry manufacturers will reduce capital expenditures, slow down expansion plans, and start considering winter matters. Previously, some IC companies took advantage of the "trend" and achieved rapid takeoff. Now, as the 'wind' is about to weaken, whether it can land safely will be a major test, and it is also a test of the achievements made in China's semiconductor industry development in recent times.
2. The Huahong Wuxi project has launched the construction of characteristic craftsmanship, which has become a key development focus
On March 2, 2018, the groundbreaking ceremony for the Huahong Wuxi Integrated Circuit R&D and Manufacturing Base project was held. The project covers an area of about 700 acres with a total investment of 10 billion US dollars. The first phase of the project has a total investment of about 2.5 billion US dollars and plans to build a 12 inch characteristic process integrated circuit production line with a process level of 90-65 nanometers and a monthly production capacity of about 40000 pieces, supporting applications in emerging fields such as 5G and the Internet of Things. The Huahong Wuxi base project will construct several 12 inch integrated circuit production lines in stages. After the implementation of the first project, the construction of the second production line will be launched in a timely manner.
Comment: The importance of distinctive craftsmanship is becoming increasingly prominent. The Internet of Things market is a killer application for the semiconductor industry, which does not rely on advanced process technology. Its product design and process mode will be very suitable for Chinese enterprises under mature process technology. For Chinese semiconductor companies, at the beginning of process platform development, they cannot solely focus on standard processes. In addition to the Huahong Wuxi project, SMIC also launched the construction of an 8-inch production line in Shaoxing in 2018, targeting the fields of microelectromechanical systems (MEMS) and power device integrated circuits.
3. Alibaba establishes' Flat Head Brother 'to enter the chip design industry
At the 2018 Yunqi Conference, Zhang Jianfeng, CTO of Alibaba and President of Damo Institute, announced the establishment of Pingpingge Semiconductor Co., Ltd. to enter the integrated circuit industry, with plans to release the first neural network chip in April 2019. In the past few years, Alibaba has been expanding its presence in the chip industry and investing in several competitive chip companies, including Cambricon, Barefoot Networks, Deep Mirror, Neng Kneron, and Aojie Technology ASR. In April 2018, Alibaba fully acquired embedded CPU IP company Zhongtianwei.
Comments: In 2018, the investment boom in the field of integrated circuits in China continued, and players in different fields were marching into the integrated circuit industry, including Internet companies Ali and Baidu, appliance manufacturers Gree and Skyworth, real estate companies Evergrande, Wanye and other giants. As a capital intensive, talent intensive, and technology intensive industry, in order for integrated circuits to truly develop, a large amount of fresh blood needs to be injected. However, if they are confined to a small circle, they will never develop well. But it should be noted that capital always has two sides. It can blow the "pig" standing in the wind up to the sky, or it can smash the "pig" to death when the wind stops.
4. Ziguang mass produces 32 layer 3D NAND storage chip with 'zero' breakthrough
In 2018, Ziguang Group mass-produced 32 layer 3D NAND Flash chips. Flash memory chips can be widely used in fields such as computers, mobile phones, monitoring, data centers, etc. In the future, they will also be used in unmanned driving, machine learning, artificial intelligence, and other areas, and are one of the key products of integrated circuits. China has long relied on foreign countries in the field of storage chips. Ziguang Group started the research and development of the 3D NAND project in 2014, and the various indicators of the 32 layer product met the expected requirements, achieving a breakthrough of zero in China's memory industry.
Comment: The 32 layer 3D NAND chip developed by Ziguang Group has met the expected requirements in various indicators, which is a key step towards the industrialization of domestic 3D NAND chips. This is the first 3D NAND chip in China developed by Tsinghua Unigroup at a cost of 1 billion US dollars and a team of 1000 people over a period of 2 years. The design level has now reached the leading level in China, making China enter the second tier of global storage chips.
5. Northern Huachuang acquires Akrion's rich cleaning equipment product line
In January 2018, Northern Huachuang announced that it had completed the acquisition of Akrion Systems LLC in the United States for a transaction amount of $15 million. Akrion has years of technical accumulation and customer base in precision cleaning technology. This acquisition will expand the production and sales system of North Huachuang in the field of cleaning machine equipment, enrich the product line of cleaning machine equipment, and achieve complementarity.
Comment: Affected by the external environment, China's international mergers and acquisitions in the semiconductor field almost came to a halt in 2018. It is not easy for North Huachuang to successfully complete this transaction. This acquisition has made the industrial layout of North Huachuang more comprehensive, providing comprehensive overall solutions for fields such as semiconductors, new energy, and new materials.
6. TSMC Nanjing factory mass produces and ships products, while mainland contract factories face competitive pressure
On May 2, 2018, TSMC's Nanjing 12 inch factory achieved the official mass production and shipment of the first batch of 16 nanometer wafers, which took only 20 months from groundbreaking to official shipment. TSMC Nanjing Factory is currently the most advanced wafer foundry in Chinese Mainland, with a planned monthly production capacity of 20000 pieces, but it is estimated that it has room to expand to 60000 pieces per month.
Comment: The rapid construction and mass production and shipment of TSMC Nanjing 12 inch Factory undoubtedly have great competitive pressure on Foundry, a local factory in Chinese Mainland. After all, the opponent is on the side of the bed, still such a formidable opponent. It is hoped that Foundry, a local factory in Chinese Mainland, can change the pressure into power, work hard, achieve 14nm as soon as possible, and raise the yield rate.
7. The IPO journey of the three major mining machine manufacturers has been bumpy, and industrial transformation has become crucial
The price of Bitcoin continued to decline in 2018, dropping to $3785 by the end of the year. The decline in Bitcoin prices and the sluggish mining machine market have had a significant impact on the listing paths of the three major mining machine manufacturers, Bitmain, Canaan Intelligence, and Yibang International. The IPO application of Bitmain has been questioned by the outside world. Jianan Yunzhi's IPO application has expired and no progress has been made. Yibang International started its second application after the first listing application expired.
Comment: At the time of launching their IPO, the three major mining machine manufacturers have embarked on a path of business transformation, expanding into new fields such as artificial intelligence. At a time when traditional businesses are facing a cold winter, seizing AI business opportunities and quickly opening up new horizons has become the key to the success or failure of the three enterprises.
8. Shanghai Xinsheng Large Silicon Wafer Mass Production and Sales Make Up for the Shortcomings in the Industry Chain
In May 2018, Shanghai Xinsheng announced that its developed 12 inch silicon wafer had achieved mass production and sales, and Shanghai Huali Microelectronics had already made small batch purchases. Afterwards, Shanghai Xinsheng also confirmed that its large silicon wafers had passed the certification of SMIC. The current monthly production capacity of Shanghai Xinsheng's 12 inch large silicon wafers is 100000 pieces. It is expected to achieve a monthly production capacity of 200000 pieces in 2019 and 300000 pieces by the end of 2020.
Comment: Large sized silicon wafers are a key material in the field of integrated circuit manufacturing and a major weakness in China's semiconductor industry chain. At present, semiconductor silicon wafer suppliers in Chinese Mainland mainly produce 6 inch and below silicon wafers, and only two or three have the production capacity of 8 inch silicon wafers, while 12 inch silicon wafers have always depended on imports. Shanghai Xinsheng is the first 12 inch silicon wafer factory built in Chinese Mainland.
9. The construction of Tianyue Silicon Carbide Material Project will be completed in two phases
On November 13, 2018, the Tianyue Silicon Carbide Material Project started construction. This is the largest wide bandgap semiconductor silicon carbide material project and complete process production line in China. The project will be constructed in two phases: the first phase will mainly produce silicon carbide substrates, with an expected annual output value of 1.3 billion yuan; The second phase mainly produces functional components, including power device packaging, modules and devices, new energy vehicles and charging station devices, rail transit traction converters, etc., with an expected annual output value of 5 billion to 6 billion yuan.
Commentary: Silicon carbide is currently the most mature wide bandgap semiconductor material, and its application scope is gradually expanding. Plays a significant role in the fields of smart grid, electric vehicles, rail transit, new energy grid connection, industrial motors, and household appliances. International leading enterprises have begun to deploy the market, and China should not miss this opportunity for industrial upgrading. We should establish independent support capabilities for the entire chain from materials, devices, modules to applications.
10. RISC-V's industry recognition has increased due to attention
In 2018, RISC-V received widespread attention from the domestic academic and industrial communities, and the industry's recognition rapidly increased. A number of RISC-V innovation forces emerged, including Hangzhou Zhongtianwei, Beijing Junzheng, Huami Technology, and Xinlai Technology. Local governments also target RISC-V related design and development companies for support.
Commentary: Developing independent intellectual property rights and mastering core technologies have become a consensus for the development of China's integrated circuit industry. RISC-V provides us with a new choice besides x86 and ARM architecture. But one should avoid swarming and speculating on hot topics, and truly grasping the essence is the foundation of success.