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China’s Strategy to Promote IC IndustryJeffrey Wang CEO Simgui Technology
SOI Silicon Valley Symposium April 26, 2018
Why Does China Take Initiatives to Promote IC Industry?
Simgui Technology
Worldwide Semiconductor Sales:China Consumption Rate Over 50%
3
33 45 49 51 55 6077
102
144 132 137 126150
204
139 141 166
213 228
248 256 249 226
298 300 292 306
336 336 339
420
0
50
100
150
200
250
300
350
400
450
USD
Billi
on
Worldwide Semiconductor Sales
China Im
ports 59% of
Semi Products
Simgui Technology
Worldwide Semiconductor Consumption: China Over 50% Since 2012
4
249226
298 300 292 306336
354 366
40% 43% 42% 47%
53% 56% 57% 59% 59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
50
100
150
200
250
300
350
400
2008 2009 2010 2011 2012 2013 2014 2015 2016
USD
Billi
on
Worldwide Semiconductor Consumption by Region
Worldwide Total China ROW America Europe JapanSource: PWC
Simgui Technology
China Semiconductor Trade Deficit: Import Over $200B in Last 5 Years
5
170192
231218
231 227
260
3353
8861 69 61 67
138 139 144157 161 166
193
0
50
100
150
200
250
300
2011 2012 2013 2014 2015 2016 2017
USD
Billi
on
China Semiconductor Import and Export
Import Export Trade DeficitSource: China Custom
Simgui Technology
Made in China 2025• Made in China 2025 is the first 10-year action plan designed to transform China
from a manufacturing giant into a world manufacturing power.
• Made in China 2025 Roadmap for building China into a Manufacturing Powerhouse is a three decade plan:
6
Made in China 2025
China's State Council unveiled a national plan recently, dubbed Made in China 2025". It is the first 10-year action plan designed to transform China from a manufacturing giant into a world manufacturing power. Made in China 2025 Roadmap for Building China into a Manufacturing Powerhouse is a three decade plan:
China’s Strategy to Become a World Manufacturing Power10
2025 2035 about 2049
Enhancing the manufacturing industry‘s innovation capability, advancing industrialization and
informatisation integration to a new level, and elevating China‘s position
in the global industrial division of labour and value chain
Reaching the medium level of the world‘s manufacturing
powerhouses, raising innovation capability significantly an
enhancing overall competitiveness considerably
Comprehensive strength to rank among the upper echelons of
the world‘s manufacturing powerhouses, a leading
technological and industrial system will be built
2049The 100th Anniversary of the People's Republic of China
Simgui Technology
Made in China 2025: Ten Key Areas
7 Source: SEMI
Made in China 2025: Ten Key Areas
China’s Strategy to Become a World Manufacturing Power13
information and communication
technology industry
new materials and composites
rail transportation
equipment
marine engineering equipment and high
technology ships
biological medicine and
high-performance medical apparatus and instruments
high-end CNC machine tools and robotics
electric power equipment
energy saving and new energy vehicles
agricultural machinery equipment
aerospace equipment
What has been done to Stimulate IC Industry?
Simgui Technology
Setup Ambitious Targets and Guideline for IC Industry Until 2030
9
Simgui Technology
China IC Industry Investment Fund (CICF): A $20B Fund to Stimulate IC Industry
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中国集成电路投资基金：国家和地方基金
About• 大基金一期投资1387亿• 已宣布的地方集成电路
基金遍布全国，总值达3200亿元以上
• 大基金以1:5撬动社会资金投资半导体
数据来源: SEMI, 2018年3月
Province/City Fund RMB BCICF 138.7
Beijing 32
Fujian 66
Guangdong 15
Hubei 30
Hunan 0.25
Nanjing 51
Wuxi 20
Liaoning 10
Shanxi 30
Shanghai 50
Shijiazhuang 10
Sichuan 12
Tianjin 0.2
Total RMB B 465.2
Total USD B 73.8
Local Government
China IC Industry Investment FundUSD 20 billion
Private Equity
USD 74B
CICF fund is managed by
Sino IC Capital.
Source: SEMI
Simgui Technology
M&A is Not a Solution for the Growth of China IC Industry• United States: Need approval by The Committee on Foreign Investment in the United States (CFIUS). • IPO in China: Need approval by China Securities Regulatory Commission.
11
Simgui Technology
China Innovation: Two Successful Stories
• China Rail: The world's largest supplier of rail transit equipment and a Fortune Global 500 company, building CR380 high speed train with 380 km/h (237 mile/h).
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• Huawei: Design own Kirin processor to win 3G and 4G smartphone market.
What has been Achieved and What is the Challenges?
Simgui Technology
China Semiconductor Industry Growth: Expect 20% Growth Rate until 2020
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9 11 16 20 20 18 23 31 34 40
48 57
69
86
103
124
148
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F2019F2020F
USD
Billi
onChina Semiconductor Industry Growth
Source: CSIA
Simgui Technology
China IC Design: CAGR 29% (2004-2017)
15
1.3 2.4 3.7 4.4 5.4 6.0 8.7 9.9 10.8
12.8 15.6
21.0
26.1
32.9
0
5
10
15
20
25
30
35
40
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
USD
Billi
on
China IC Design Growth
SalesSource: CSIA
Simgui Technology
IC Design Enterprises in China
16
15 17 20 23 27 32 41 56 62 76 98 200
389 463 471 479 488 491 483 472 485 502 518
583 681
736
1362 1380
0
200
400
600
800
1000
1200
1400
1600 IC Design Enterprises in China
1990-1999Close Door Policy
2000-2014Open Door Policy
2015-2020Stimulate Policy
Source: PWC
Simgui Technology
2017 Top 10 IC Design/System Company: Two Chinese Companies Among the List
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2017E Rank Company Headquarter 2016 2017E 2017/2016
% Change1 Qualcomm US 15,414 17,078 11%2 Broadcom Singapore 13,846 16,065 16%3 Nvidia US 6,389 9,228 44%4 MediaTek Taiwan 8,809 7,875 -11%5 Apple US 6,493 6,660 3%6 AMD US 4,272 5,249 23%7 HiSilicon China 3,910 4,715 21%8 Xilinx US 2,311 2,475 7%9 Marvell US 2,407 2,390 -1%
10 UnigroupSpreadtrum and RDA China 1,880 2,050 9%
- Top 10 Total - 65,731 73,785 12%- Other - 24,694 26,825 9%- Total Fabless/System - 90,425 100,610 11%
• Two Chinese companies, HiSilicon and Unigroup (Spreadtrum and RDA), are among the top 10 fabless IC sales leaders.
USD million
Source: IC Insight
Simgui Technology
China IC Manufacturing: CAGR 15.6% (2008-2017)
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6 5 7 7 8
10 11
14
18
23
0
5
10
15
20
25
30
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
USD
Billi
onChina Manufacturing Growth
SalesSource: CSIA
Simgui Technology
China Semiconductor Fab and New 300mm Fab Activity
19
27
Distribution of China 's Semiconductor Fabs
Major New Fabs：
- SMIC Beijing B2 in operation, B3 under construction, Shanghai: two 12-inch lines; Shenzhen: a 12-inch line; Ningbo one 8-inch line
- Wuhan Changjiang Memory(YMTC) initiated in March 2016, 3 NAND & NOR production lines;
- Hua Li new 12-inch line in Zhoupu; - Intel Dalian fab converted into NAND
production- UMC Xiamen 12-inch fab,production in
2017 - Jinghe Hefei 12 inch fab under
construction, production in 2017; - TSMC Nanjing 12-inch fab foundation,
production in 2018; - Jinhua new 12-inch memory fab
No ProvinceCity Company New 12” Fab
Activity
1 Beijing SMIC B3 28-14nm
23 Shanghai
SMIC 12” 28-14nm
Huali 12” 28-14nm
4 Wuxi Huali 12” 65-45nm
5 Wuhan YMTC 12” NAND and NOR
6 Hefei JingHe 12” line
7 Fujian Jinhua 12” memory
8 Nanjing TSMC 12” 14nm
9 Xiamen UMC 12” line
10 Dalian Intel 12” line convert NAND
11 Chengdu GF 12” 22nm FDX
12 Chongqing AOS 12” power managementSource: SEMI
Simgui Technology
China IC Packaging: CAGR 13.2% (2008-2017)
20
9.8 7.9
10.0
15.5 16.4 17.4 19.9
22.0 24.8
30.0
0
5
10
15
20
25
30
35
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
USD
Billi
on
China IC Packaging Growth
SalesSource: CSIA
Simgui Technology
2017 Top 10 IC Testing/Assembly Company: Three Chinese Companies Among the List
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2017E Rank Company Headquarter 2016
1 ASE Taiwan 4,861
2 Amkor US 3,902
3 SPIL Taiwan 2,638
4 JCET China 2,280
5 PowerTech Taiwan 1,506
6 STATS ChipPAC (acquired by JCET) Singapore 1,078
7 Hianshui Huatian China 811
8 TFME China 764
9 KYEC Taiwan 743
10 ChipMOS Taiwan 583
- Top 10 Total - 19,166
USD million
Source: IC Insight
Simgui Technology
Opportunity and Challenge for China IC Industry
• Although there is high growth in all sectors of semiconductor industry, the gap is still huge to meet the demand for China market.
• For advanced IC chips such as CPU, DSP, FPGA, etc., there is big gap on design capability. There is no microprocessor and memory that counts for 70% of IC import.
• Process technology is two generations behind leading foundries.
• Most of semiconductor equipment needs to be imported.
• Most of semiconductor materials needs to be imported including 300mm wafer.
• There are not enough talents and EE students for so many new fabless companies and new Fab’s.
22
What is the Plan from NSIG and Simguion Silicon Material and SOI?
Simgui Technology
National Silicon Industry Group NSIG:To Support Material Ecosystem in China
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China IC Fund
Shanghai Local Fund
12” Wafer 8” SOI / EPI 8” Wafer
Supported by China IC Fund and Shanghai local fund as part of China’s strategy to promote IC industry in material area.
To establish a materials eco-system to support the growth of the semiconductor industry in China.
Simgui Technology
Simgui Expands 200mm SOI Capacity to Support RF and Power SOI Market
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1,500 1,500 1,555 1,700 1,820 1,910 1,950
0
500
1,000
1,500
2,000
2,500
3,000
2015 2016 2017 2018F 2019F 2020F 2011F
Waf
er p
er Y
ear K
200mm SOI Capacity vs Demand (TAM 8” equivalent)
SimguiSupplier-3Supplier-2Supplier-1TotalRF DemandRF+Power Demand
• Simgui expands 200mm SOI capacity to 400K per year by 2020.• Some of RF products will be converted to 300mm SOI.
Simgui Technology
Simgui to Expand Manufacturing Facility to 300mm SOI
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• 300mm Fab construction is completed. Total planned capacity is at 800K per year.
12” SOI Fab(Fab Construction Completed)
8” SOI Fab(Production)
Phase 1
Phase 2
Simgui Technology
Summary• China takes initiatives to promote IC industry and setup ambitious targets and
guideline until 2030.
• China IC Industry Investment Fund (CICF) is established to support domestic IC supply chain. Together with local government and private equity, total IC funds have reached USD 74 billions.
• China IC industry keeps double digit growth for more than 10 years in all sectors of semiconductor industry including design, manufacturing and packaging.
• There are still many challenges ahead to advance China IC industry.
• NSIG is setup to establish a material ecosystem to support China semiconductor industry. Simgui is focused on 200mm SOI material and plans to expand to 300mm SOI.
27
