On March 23, U.S. President Trump signed a memorandum of the president, planning to impose a 25% tariff on at least US$50 billion of Chinese imports, and will establish new investment restrictions. In addition to the desire to reduce the US$100 billion trade deficit, the “301 Investigative Report†issued by the US also blames China’s “chips†industry for ways to acquire intellectual property rights of overseas companies and cross-border acquisitions.
Relying heavily on imports, the trade deficit widened
One of the reasons for the prominent position of the chip in the Sino-US trade war is that China is the world's largest semiconductor chip consumer market. However, for a long time, China's integrated circuits have relied heavily on imports and the trade deficit has continued to expand.
China Semiconductor Industry Association (CSIA) statistics show that in 2017 China's integrated circuit product demand reached 1.40 trillion yuan (about 7 trillion TWD), but the domestic self-sufficiency rate was only 38.7%. In the same year, China’s integrated circuit import volume exceeded US$260 billion (approximately 7.8 trillion) and has replaced crude oil as China’s largest import commodity. At the same time, the trade deficit of ICs reached a record high in 2017, reaching US$ 193.2 billion (approximately 6 trillion TWD).
In the strong demand for chip imports, the United States is an important chip importer in China. The “Research Report on China-US Economic and Trade Relations†issued by the Ministry of Commerce in May 2017 shows that 15% of ICs exported by the United States are sold to China.
China is already an important market for American chip makers. The financial report shows that Qualcomm's revenue in mainland China for fiscal year 2017 was 14.579 billion U.S. dollars (437.3 billion U.S. dollars), accounting for 65% of the total revenue. As early as 2010, Qualcomm’s revenue from the Chinese mainland market reached 29%, surpassing South Korea as its largest market.
Another memory chip giant, Micron, had revenue of US$10.4 billion (approximately NT$301.2 billion) in mainland China in 2017, accounting for 51% of its total revenue. The share of the Chinese mainland market in Micron’s total revenue maintained at over 40% during 2013-2016.
The global chip industry is currently very stable. Taking the memory chip as an example, the current two major mainstream memory DRAMs and NAND Flash have formed a relatively monopoly pattern. In 2017, Samsung, SK Hynix, and Micron all accounted for 95% of the DRAM market, while the NANDFlash market was split between Samsung, Toshiba, Western Digital, Micron, SK Hynix and Intel.
In the mobile chip field, Countpoint’s statistics for the third quarter of 2017 show that Qualcomm ranked first with more than 40% market share, Apple was ranked 2nd with 20% market share, followed by MediaTek. Samsung and China’s Hass and Spreadtrum. The important point is that the market share of Q3 in 2016 is exactly the same, except for the specific figures.
Internal and external attacks
Chinese companies have long been in the low-end sector in the global chip industry landscape. At present, China can independently manufacture low-end chips such as analogs and separations, but high-end chips such as logic and memory cannot currently be self-sufficient. In addition, companies such as Ziguang Zengrui, Huawei Hass, etc. can also produce radio frequency chips and baseband chips for mobile phones. However, Hass and Spreadtrum accounted for 8% and 5% of the market share in the third quarter of 2017 respectively. It is understood that Hass' Kirin chips are used in Huawei itself and have not been used outside.
Chinese companies are also weaker in the global chip industry chain. In many aspects such as design, manufacturing, and packaging and testing, Chinese companies are in the first echelon in the field of low-end packaging and testing.
There are internal worries at the same time. The domestic battlefield of Chinese chip companies has already had many international chip giants coming to build factories and seizing market share. The latest news of the construction came from South Korea's Samsung. On March 28, Samsung announced the construction of its second semiconductor plant in Xi'an, Shaanxi Province. The first phase of the plant's cumulative investment amounted to 10 billion US dollars (about 300 billion Taiwan dollars), and now has a full line of production lines. The second-stage production line investment is about 7 billion US dollars (approximately NT 210 billion).
Self-sufficiency is imminent
At a time when the targeted US trade war has begun, it is extremely imminent for China to increase its self-sufficiency in chips. In terms of funding, in 2014 China established the National Integrated Circuit Industry Investment Fund to support related companies in the chip industry chain, and the first phase of investment funds exceeded RMB 138.7 billion. In January 2018, it was reported that the fundraising for the second phase of the fund had also been started and it was expected to reach 200 billion yuan.
Chinese companies are also trying to adopt the pattern of going out and acquiring. Ziguang Group has initiated a series of mergers and acquisitions in the field of chips at home and abroad. In 2016, after Ziguang Group tried to invest RMB 24 billion in the final abortion of Western Digital, the two parties announced the establishment of a joint venture company in September of that year, of which Ziguang Group, which under the Ziguang Group, holds 51%. In 2015, Ziguang Group also reported that it had attempted to acquire Micron for US$23 billion (approximately 609 billion U.S. dollars), but it has also failed because of national security issues.
For the Chinese chip industry, manufacturing is a relatively quick breakthrough in the future. Liu Wei, general manager of CCID Consulting's IC Industry Research Center, said that the 12-inch chip production line in China is accelerating its construction and there are currently more than 20 under construction or preparations. He predicted that by 2020, domestic chip companies will achieve relatively rapid development in the manufacturing sector.
Chinese chip companies have invested heavily. In the field of memory chips, the Ziguang Group's Yangtze River Storage has a $24 billion 3DNANDFlash production line, Fujian Jinhua's first phase of a 37 billion yuan DRAM niche chip production line, and Hefei Changxin's total investment of 49.4 billion yuan in DRAM production lines. Both are expected to start production in 2018.
I Hui Semiconductor analyst He Hui believes that the domestic chip can not get rid of import dependence, it is difficult to surpass the technology. The technology of foreign chip giants has accumulated for decades, and Chinese companies still have a long way to go. She said that the United States has its own industrial protection and does not want China to overtake it too soon.
Liu Ye also said that Chinese chip companies are relatively backward in terms of technology. In addition, the technology foundation of some chip giants is very strong and some intellectual property rights cannot be avoided.
However, it is worth noting that with the outbreak of artificial intelligence, startup companies in the domestic AI chip field, such as the Cambrian, Horizon, and Shen Jian Technology, have received financing. Liu Ye believes that the transformation of customized chips will help domestic chip companies to occupy special areas in advance.
However, he also believes that although China is relatively at the forefront in the field of AI chips, this outbreak is driven by downstream applications. If the application does not rise, it will still affect the entire market.
It is a terminal reader equipped with barcode or OCR code technology, with cash or barter limit cashier function. Its main task is to provide data services and management functions for commodity and media transactions, as well as non-cash settlement. POS is a multi-function terminal. It can be installed in the special merchants and acceptance outlets of credit cards to form a network with the computer, and the automatic transfer of electronic funds can be realized. It has the functions of supporting consumption, pre-authorization, balance inquiry and transfer. Safe, fast and reliable. It is difficult to obtain basic business information in bulk transactions. The introduction of the POS system is mainly to solve the blind spot of information management in the retail industry. An important part of the chain store management information system.
15 Inch Pos,Mobile Pos Machine,Pos Swipe Machine,Debit Card Swipe Machine
ShengXiaoBang(GZ) Material Union Technology Co.Ltd , https://www.sxbgz.com