Reporter Li Yuyang reports from Shanghai

With the gradual improvement of the industrial ecology, the degree of self-control of semiconductors in China has also been further improved.

According to data released by the General Administration of Customs, China imported 479.5 billion integrated circuits in 2023, a decrease of 10.8 percent from 2022; the amount of imports was 349.4 billion billion U.S. dollars, a decrease of 15.4 percent year-on-year. According to data from the National Bureau of Statistics, for the whole of 2023, my country's domestic integrated circuit production was 351.4 billion pieces, a year-on-year increase of 6.9.

In the context of the global semiconductor industry's downward cycle, these data also reflect to a certain extent that Chinese companies are trying to increase local chip production to reduce their dependence on imported chips. A reporter from China Business News noted that in the past two or three years, due to US restrictions on China's semiconductor industry, Chinese semiconductor manufacturers have further accelerated the replenishment of the domestic semiconductor supply chain out of consideration for their own supply chain security.

Zhang Guobin, CEO of Electronic Innovation Network, told reporters that in the past two or three years, western countries led by the United States have issued a series of bans and measures, which have strengthened China's determination to build a complete independent semiconductor industry chain and inspired the passion of hundreds of local enterprises to make up for the shortcomings of the industry chain. Breakthroughs have been made in production, equipment, materials, EDA tools, IP, sealing and testing, for example, photoresist has achieved independent supply of KrF and ArF, and breakthroughs have been made in cleaning, etching, PVD/CVD and other equipment.

It is worth noting that AI chips, as an important driving force leading a new round of technological revolution and industrial transformation, have received great attention in the past two years. AI chip overlord NVIDIA recently submitted to the US Securities and Exchange Commission for the first time listed Huawei as a major competitor in multiple categories.

"for domestic AI chip enterprises, the key is to realize the migration to the domestic supply chain. in this process, many difficulties will be encountered, including the lack of necessary support such as IP and tool chain, as well as the production capacity and yield of domestic factories." A domestic AI chip company research and development personnel Qin Xin (pseudonym) told reporters.

Multi-link breakthrough

"EDA tool field is an area where we have made rapid progress. We have initially realized the whole process tool (independent production), and a large number of excellent enterprises have emerged, such as Huada Jiutian, General Lun Electronics, Core Huazhang, Si Er Core, etc." In the process of complementing the domestic semiconductor industry chain, Zhang Guobin pointed out that the domestic EDA industry has achieved a good breakthrough.

It is understood that EDA, also known as electronic design automation, is the software needed for chip design, manufacturing, sealing and testing. It does not refer to one or several software, but involves nearly 100 different technologies, covering a variety of "point tools" software tool cluster, known as the "mother of chips". Although the EDA threshold is not as high as the lithography machine, it is also one of the "stuck neck" technologies that China's chip industry needs to break.

Shanghai Hechai Industrial Software Group Co., Ltd. (hereinafter referred to as "Hechai Industrial Software"), a provider of industrial software and chip solutions, has previously told reporters that China EDA has mainly gone through three stages: from scratch, to product performance benchmarking international products, and finally to the formation of an ecology of industrial synergy.

"In recent years, the development of China's EDA industry has begun to take shape, and the industrial ecology is also taking shape." For example, in the field of analog design EDA tools and manufacturing, there have been excellent domestic EDA companies for many years, while in the field of digital design and verification, there are also start-up EDA companies whose tools have been recognized in the industry.

in June 2023, co-founder soft announced that it would join hands with Beijing huada for nine days to build a joint solution for digital-analog hybrid design and simulation EDA. In response, Gao Chen (pseudonym), an insider of a domestic EDA company, told reporters at that time that the incident was very influential in the industry. "For the first time, domestic EDA companies joined hands, and the previous case was to bind foreign large EDA platforms".

Zhang Guobin pointed out that with the emergence of Huawei's Mate 60 series, the return of its new Kirin 9000 chip has realized the independent control of advanced technology. Although the actual supplier of the new Kirin 9000 chip is still unknown, China already has advanced process chip manufacturing capabilities that are not controlled by the long arm jurisdiction of the United States.

Dylan Patel, a well-known semiconductor industry analyst, after analyzing the process level, believes that the new Kirin 9000 is comparable to Qualcomm's best baseband chip, and its manufacturing process is better than most people in the West realize, and bluntly stated that the US semiconductor export control to China "has failed".

In addition, Zhang Guobin also pointed out that Chinese companies have also made breakthroughs in the IP field. At present, the most advanced computing power interface IP and GPU IP can be localized. In the field of sealing and testing, a large number of outstanding enterprises such as Changdian Technology and Huatian Technology already have the latest core particle packaging capabilities.

It is worth noting that Zhang Guobin said that Chinese companies have also made achievements in the formulation of semiconductor standards. "Our own Xingshan (NearLink) technology has been recognized by hundreds of companies and is being vigorously promoted". In addition, the local micro-control unit has become the protagonist in the low-end field, and is currently hitting the high-end.

"local CPU, GPU, artificial intelligence computing products and car regulation industry have also broken the monopoly of Europe and the United States and continue to develop in depth, especially the open source instruction set RISC-V processor. China has rapidly developed into a global RISC-V application center." Zhang Guobin said.

Domestic semiconductor industry chain strengthening

From the perspective of the stock market, the growth of market demand scale and the acceleration of localization have become important reasons for the 2023 performance growth of many companies in the domestic semiconductor industry chain.

Gao Chen also said that customers who have domestic use needs are very supportive of domestic EDA. Among them, customers from HPC (high performance computing), communications and other industries have given support to help test and iterate.

In the domestic semiconductor equipment market, overseas manufacturers have a high market share. However, in the released 2023 performance forecast, many domestic semiconductor equipment companies stated that their main equipment products have excellent performance, stable quality, continuous growth of sales orders, continuous improvement of brand recognition, and further expansion of customer group coverage.

The latest annual report of Shengmei Shanghai (688082.SH), a semiconductor equipment company, showed that the operating income in 2023 was 3.888 billion billion yuan, up 35.34 percent from the same period last year, and the net profit attributable to shareholders of listed companies was 0.868 billion billion yuan, up 25.77 percent from the same period last year. Shengmei Shanghai said that in 2023, with the continuous improvement of the company's technical level, product maturity and market recognition of the company's products, the company's business development is rapid and sales revenue continues to grow.

according to the statistics of bank of China securities, the domestic market share of shengmei Shanghai cleaning equipment is 23%, while the Gartner 2022 data show that shengmei Shanghai's market share in the global single-chip cleaning equipment has risen to 7.2.

The 2023 annual performance report of the semiconductor equipment company Zhongwei Company (688012.SH) shows that the operating income is about 6.264 billion yuan, an increase of 32.15 year-on-year; the net profit attributable to shareholders of listed companies is about 1.786 billion yuan, an increase of 52.67 year-on-year. The company previously stated that the amount of new orders in 2023 was about 8.36 billion yuan, an increase of about 32.3 percent year-on-year, of which new orders for etching equipment were about 6.95 billion yuan, an increase of about 60.1 percent year-on-year.

China Micro also said that thanks to the company's complete single and double etching equipment layout, continuous breakthrough in core technology, rapid iteration of product upgrade, rich etching application coverage and other advantages, the company's CCP and ICP etching equipment in 2023 in the domestic major customer chip production line market share increased significantly.

The increase in the market share of domestic semiconductor equipment manufacturers is a microcosm of China's creation of an independent and controllable semiconductor industry chain. "We have huge overall advantages. The combination of local semiconductors and local overall enterprises can achieve super innovation, just like Huawei Mate60, which integrates local advantages and achieves a high level of innovation that foreign enterprises cannot match." Zhang Guobin said.

More innovations needed in the future

in the past year, the explosion of ChatGPT, the explosive growth of AI large models, and the advanced process large computing chips used for large model training have been recognized as part of strategic and overall value in AI computing competition. Avida has also exceeded 2 trillion us dollars in market value by virtue of its product advantages in this field.

However, domestic AI chip companies have a big gap with their peers. "For domestic AI chip companies, the core key is to realize the migration to the domestic supply chain. In this process, we will encounter many difficulties, including the lack of necessary support such as IP and tool chain, as well as the production capacity and yield of domestic foundries. Wait." Qin Xin said that domestic contract manufacturing to make up for TSMC's gap will be the focus of the development of domestic AI computing chips in 2024.

Despite the multi-level sanctions imposed by the United States on AI chips, domestic AI chip design companies have not given up their efforts. "We continue to develop a number of competitive AI chip products through different approaches such as chip architecture innovation and the adoption of the latest chip design technology. The emergence of these products not only fills the gap in the domestic market, but also enhances China's position in the global AI chip market to a certain extent." Qin Xin pointed out.

for example, many large domestic customers began to consider using Huawei AI chip rising 910B. Jiang Tao, vice president of xunfei of HKUST, revealed that the ability of ascension 910B has basically been able to benchmark the latest A100 chip launched by Avida. based on the large-scale intelligent computing cluster infrastructure of ascension 910B, it has been tested in many intelligent computing centers and telecom operators in China.

However, Qin Xin believes that US sanctions on Chinese AI chips may be further strengthened in 2024. "First of all, domestic companies need to further strengthen their independent research and development capabilities and improve the performance and stability of chips to meet the growing market demand. Secondly, domestic enterprises also need to strengthen cooperation with universities and research institutions at home and abroad to jointly promote the innovation and development of AI chip technology. Finally, the government also needs to increase its support for the domestic AI chip industry and provide more financial, policy and talent support to help domestic enterprises tide over the difficulties." He suggested.

"The past two or three years have been a period of rapid development in China's local semiconductor industry, but at present we have only achieved a breakthrough of 0 to 1. To achieve a breakthrough of 1 to 100 and 1 to 1000, we also need to pay attention to high-quality development. We need more innovation at a low level. At the same time, we should also consider finding another way and not following the old path taken by Europe and the United States." Zhang Guobin said.