Allen Lu, Ph.D., SEMI China President
March 12, 2015, Shanghai, GSF 2015
Overview of China Semiconductor Industry
Agenda
• Global and China Semiconductor Market
• Challenges and Opportunities of China
Semiconductor Industry
• Recent Government IC Initiatives
Americas
27%
Taiwan
12%
China
12%
Europe
14%
India
1%
Japan
23%
Korea
9%
Singapore
2%
CHINA 320
Companies
EUROPE 255 Companies
INDIA 25 Companies
JAPAN 414
Companies
KOREA 203
Companies AMERICAS 476
Companies
SINGAPORE 33 Companies
TAIWAN 215 Companies
About 2000 members globally SEMI member HQ region
Total Members by Size
Under $5 M
67%$1B - $2B
1%
$500M - $1B
1%
$100M - $500M
3%
Over $2.5B
>1%
$25M - $100M
6%
$5M - $25M
22%
SEMI: global & professional
Semiconductor Industry Association
16%
Global and China
Semiconductor Market
Semiconductor Industry:
Powered by the Applications
PC
Mobile Computing,
Internet of Things
Mobile
Phone
Equipment
Materials
Semiconductors
Electronic End Equipment
Semiconductor /Electronic Industry
Supply-Chain
Source: WSTS/SIA, SEMI, and IC Insights
2013
Forecast2014
$32B $38B
$1,488B $1,412B
$306B $325B
$45B $47B
Capacity Increase Slowing Down
Europe
6%Japan
10%
North
America19%
Korea
18%
Taiwan
30%
China
13%
SEA
4%
Global Semiconductor Equipment Market
(Including A&T Equipment)
Totals may not add due to rounding
2014F = $38.4 Billion
2014F 2015F %
$B $B Change
Europe 2.49 3.68 48%
China 4.98 5.06 2%
North America 7.15 7.33 3%
South Korea 6.94 7.98 15%
SEA 1.66 2.05 23%
Japan 3.65 4.22 16%
Taiwan 11.57 12.27 6%
Total Regions 38.44 42.59 11%
Region
Source: SEMI
Europe
7%
Japan
17%
North
America11%
Korea
16%
Taiwan
21%
China
13%
SEA
15%
Totals may not add due to rounding
2014F = $44.7 Billion
2014F 2015F %
$B $B Change
Europe 3.13 3.24 4%
China 5.77 6.09 6%
N orth America 4.93 5.11 4%
South Korea 7.17 7.64 7%
SEA 6.77 7.12 5%
Japan 7.40 7.47 1%
T aiwan 9.58 10.02 5%
T otal Regions 44.75 46.69 4%
Region
Source: SEMI Materials Market Data Subscription August 2014
Global Semiconductor Material Market
(Including A&T Material)
China Semiconductor Industry:
Challenges and Opportunities Coexist
2014 Leading Imports to China
11
Source: China’s Customs
0 500 1000 1500 2000 2500
液晶面
板
铁矿石
原油
集成电
路芯片
496
1057
2197
2313
Unit:$100M USD
China’s Electronic Products Manufacturing
Drives Huge IC Consumption
Source –CVIA, Ministry of Information Industry of China, SEMI, May 2014
Example of China’s Electronic Product Output in 2013
Output
(Million units)
Growth
Rate
% of World Output
Export
(Million units)
Cell Phone 1456 23.2% 81.1% 1190
LCD TV 122.9 7.2% 56.9% 54.6
Notebook
& Tablet 273 7.9% 70% 326.7
Digital Camera
46.8 -33.1% 74.5% 41
China Semiconductor Industry
Continuous to Grow
Source: CSIA, SEMI, SICA
1.5 2.3 3.0 3.4 4.0 5.4 8.1 9.8
13.0
2.2 2.8 3.9
5.2 5.7 5.0 6.6
6.7 7.9
9.7
3.0 3.4
4.2
6.4
8.3 8.9 7.3
9.3
15.1
16.4
17.7
2.4 3.3 4.3
6.7 8.6
12.6
16.4 17.9 16.2
21.3
29.9
34.2
40.5
0
5
10
15
20
25
30
35
40
45
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
IC P&T (USD Billion)
IC Manufacture (USD Billion)
IC Design (USD Billion)
IC Industry (Design+Manufacture+P&T)
China IC Industry Revenue
Expanding 300mm Capacity in China
Source: SEMI China, Oct. 2014
Company Location Tech-node
(nm)
Capacity
(K/month) Products Status
Huali Shanghai 55 25 Foundry Will add capacity to 35K/M
SK Hynix Wuxi 29 130 DRAM Production & Upgrade
Intel Dalian 65 15 Chipset Production
Samsung Xi’an 20 40 NAND
Flash
Total plan for Xi’an 1st phase:
100K/month
SMIC Beijing 40 36 Foundry Production
SMIC Beijing 40-20 (Planned)
- Foundry Construction. 5K-6K/M in end of
2014
SMIC Shanghai 40 14 Foundry Production and
expand to 14K/M in 2014
WXIC Wuhan 45 9 NOR Flash,
Foundry Production
Key Local Semiconductor
Equipment Suppliers
Equipment Company
Exposure & Write Equipment SMEE
Photoresist Processing Equipment Kingsemi
Etch Equipment AMEC, NMC
Surface Conditioning Equipment Sevenstar, Kingsemi, ACM
Thermal Process Equipment Sevenstar
Ion Implant Equipment ZKX
Thin Film Deposition Equipment (CVD/
Sputter/Electroplating/electro deposition) NMC, Piotech
Inspection & Measurement Equipment Grand,Raintree
CMP Equipment Tianjin Hwatsing
Key Local Semiconductor
Material Suppliers
Material Company
Wafer Gritek, JRH, Simgui, Waferworks
Lithography related materials (photoresist, developer, etc.) Kempur, Ruihong
Sputtering Targets KFMI, Grikin
CMP Slurry Anji
Plating solution Sinyang
Chemicals Runma, Jingrui, Huayi
Special Gas Huategas, Jinhong, Creditchem
Through government policy, special project funding, and efforts of
the industry, China’s equipment & material companies covered all
major process sectors
Global Semiconductor Industry Highly Consolidated
2013
Rank Company HQ
2013 Revenue
(in US Million)
2013
Rank Company HQ
2013 Revenue
(in US Million)
1 Intel U.S. 48,321 11 Renesas Japan 7,975
2 Samsung Korea 34,378 12 AMD** U.S. 5,299
3 TSMC* Taiwan 19,850 13 Infineon Europe 4,862
4 Qualcomm** U.S. 17,211 14 Sony Japan 4,869
5 Micron U.S. 14,360 15 NXP Europe 4,815
6 SK Hynix Korea 12,970 16 MediaTek** Taiwan 4,587
7 Toshiba Japan 11,958 17 GlobalFoundries* U.S. 4,261
8 TI U.S. 11,474 18 Freescale U.S. 4,007
9 Broadcom** U.S. 8,219 19 UMC*
Taiwan 3,959
10 ST Europe 8,014 20 Nvidia** U.S. 3,898
Source: IC Insights, 2014
Top 20 Semiconductor Companies by 2013 Revenue
* Foundry **Fabless
Global Semiconductor Industry Highly Consolidated
2013
Rank Company HQ
2013 Revenue
(in US Million)
2013
Rank Company HQ
2013 Revenue
(in US Million)
1 Intel U.S. 48,321 11 Renesas Japan 7,975
2 Samsung Korea 34,378 12 AMD** U.S. 5,299
3 TSMC* Taiwan 19,850 13 Infineon Europe 4,862
4 Qualcomm** U.S. 17,211 14 Sony Japan 4,869
5 Micron U.S. 14,360 15 NXP Europe 4,815
6 SK Hynix Korea 12,970 16 MediaTek** Taiwan 4,587
7 Toshiba Japan 11,958 17 GlobalFoundries* U.S. 4,261
8 TI U.S. 11,474 18 Freescale U.S. 4,007
9 Broadcom** U.S. 8,219 19 UMC*
Taiwan 3,959
10 ST Europe 8,014 20 Nvidia** U.S. 3,898
Source: IC Insights, 2014
Top 20 Semiconductor Companies by 2013 Revenue
* Foundry **Fabless
Global Semiconductor Industry Highly Consolidated
2013
Rank Company HQ
2013 Revenue
(in US Million)
2013
Rank Company HQ
2013 Revenue
(in US Million)
1 Intel U.S. 48,321 11 Renesas Japan 7,975
2 Samsung Korea 34,378 12 AMD** U.S. 5,299
3 TSMC* Taiwan 19,850 13 Infineon Europe 4,862
4 Qualcomm** U.S. 17,211 14 Sony Japan 4,869
5 Micron U.S. 14,360 15 NXP Europe 4,815
6 SK Hynix Korea 12,970 16 MediaTek** Taiwan 4,587
7 Toshiba Japan 11,958 17 GlobalFoundries* U.S. 4,261
8 TI U.S. 11,474 18 Freescale U.S. 4,007
9 Broadcom** U.S. 8,219 19 UMC*
Taiwan 3,959
10 ST Europe 8,014 20 Nvidia** U.S. 3,898
Source: IC Insights, 2014
Top 20 Semiconductor Companies by 2013 Revenue
* Foundry **Fabless
Revenue:Top 20 account for 75% of worldwide.
Spending:Tope 5 account for 66% of all
R&D:Top 10 R&D expense 28.6 billion USD,more than
sum of all the rest companies.
Capacity:Samsung, TSMC, Micron, Hynix, Toshiba, Intel
account for 43% of global capacity.
Top 10 Semiconductor Equipment Suppliers
20
2013 Ranking
Company Main Product Areas 2013 Revenue
($B)
2013 Market
Share (%)
1 Applied Materials Thin film, Dry etch, CMP, ion implant,
metrology and inspection 5.46 16.2
2 ASML Lithography 5.30 15.7
3 Lam Research Dry Etch, Thin film, wafer clean 3.16 9.4
4 Tokyo Electron Thermal processing, coat/develop
Track, dry etch, wafer clean 3.06 9.1
5 KLA-Tencor Inspection & measurement 2.16 6.4
6 Dainippon Screen
Manufacturing Coat/develop track, wafer clean 1.22 3.6
7 Hitachi High-Technologies
Dry etch, metrology & inspection, assembly
0.86 2.6
8 Advantest Test 0.85 2.5
9 Teradyne Test 0.82 2.4
10 Nikon Lithography 0.64 1.9
Others 10.24 30.3
Source: Gartner, 2014
Global Semiconductor Equipment
Industry Consolidation Speedup
Mobile Internet brings explosive growth of
computing and communication terminals
10X
Source: Samsung
# of connected devices
exceeds population
50B connected
devices by 2020
Who can make money in the new
business model?
Fewer and Fewer semiconductor manufacturers
can afford the cost of leading edge fab.
Will cost driver of Moore’s Law
disappear in 20nm? Lisa Su,
AMD
ISSCC ‘13
Keynote
24
WCR, SEMICON CHINA, March 2014
Source: Mentor Graphics
Will cost driver of Moore’s Law
disappear in 20nm? Lisa Su,
AMD
ISSCC ‘13
Keynote
“No cost/transistor crossover for first time
at 28 20nm transition”
25
WCR, SEMICON CHINA, March 2014
Source: Mentor Graphics
Will cost driver of Moore’s Law
disappear in 20nm? Lisa Su,
AMD
ISSCC ‘13
Keynote
“No cost/transistor crossover for first time
at 28 20nm transition”
26
WCR, SEMICON CHINA, March 2014
Source: Mentor Graphics
Gartner DataQuest:
28nm will be a long
node
Challenges of China semiconductor industry
• Global industry consolidation creates higher entry-barrier for new comers.
• China semiconductor industry started late, lack of scale & core competencies.
• Advanced IC manufacturing requires huge funding.
• Technology, talent, market, supply-chain all global for Semiconductor industry.
• Semiconductor industry is no longer a regional industry. What is China’s
positioning?
• Chinese companies’ capability to go global (technology, marketing, business
practice, decision process, …).
• Reliance on government initiatives and funding hinders competitiveness.
• Need to establish solid business model & core competencies, avoid competing
on pricing only.
Opportunities of China semiconductor industry
• Government resolve and resources to scale up China’s IC manufacturing.
• Semiconductor industry entering mature phase with narrower margin. Electronic
device manufacturing continue to transfer to Asia from US, Japan and Europe.
• Semiconductor no longer favored by investors in US. Almost NO US VC funding
to equipment and materials companies in the last 10 years.
• China’s economy scaled up: capital and talent no longer the “show-stoppers”.
• Electronic product eco-system established in China: products increasingly being
defined and developed in China (especially in mobile and consumer sectors).
• Culture, language, eco-systems, of the application market increasingly replace
cost become the new advantages.
• Abundant engineer & science graduates coming to industry.
• Cost advantage still exists.
Recent Developments of China’s
Semiconductor Industry
China IC Industry Policies Summary
“Document
No. 18” (2000)
2000.06: Policies on
further encouraging the
development of
software and integrated
circuit (IC) industry.
“Science and technology
development program” (2006)
2006.02: Circular of State Council on Supporting
Policies of Implementing Outline of Long and
Medium-Term National Scientific and Technological
Development Program (2006-2020). Define 01 project:
core devices, high end general chips, and basic software & 02
project: VLSI Equipment & Material Manufacturer and Process
Technology R&D.
“Document
No. 4” (2011)
2011.02: A Basket
of Measures to
Further Boost the
Software and IC
Industry.
“National
Guideline”
(2014 )
2014.06.24: National
Guideline for
Development of the
IC Industry.
2000 2006 Year 2011 2014
• 2014.07.29 Shandong Province issued document “ About implementation of
Document No. 4 to speed up IC industry development”
• 2014.07.31 Gansu Province issued “About Gansu Province’s implementation of
National Framework for Development of the IC Industry”
• 2014.08 Anhui Province issued document “About to speed up IC industry
development”
• 2014.08 Sichuan Province has worked out IC industry development
implementation policies, and set up IC industry investment fund. (From news, not
confirmed.)
• ………
Developing Target of 2014 Guideline
2015 2020
Total Revenue >350 Billion RMB >870 Billion RMB (CAGR > 20%)
IC Manufacture 32/28nm mass production 16/14nm mass production
IC Design
Part of key area technologies approach
international first class level
(e.g. mobile smart terminal, network
communication)
Key area technologies achieve international leading
edge. (e.g. mobile smart terminal, network
communication, cloud computing, IOT, big data, etc)
Packaging & Test
Mid- to high-end revenue > 30% revenue Technology to achieve international leading edge
Material 12 inch silicon wafer into production line. Enter global supply chain
Equipment 65-45nm key equipment into production line. Enter global supply chain
Key words:
Scale, Fund, Market, M&A,
Global collaboration, …
Revenue Target of 2014 Guideline (China IC
industry new policy)
Source: CSIA, SEMI
China IC Industry Revenue and Projection
40.5
57.5
143
$ Billion
Notes:
1. The Revenue number is the sum of China IC companies’
sales, including IC Fabless, Foundry, IDM & OSAT;
2. Revenue Target (2015) : >$57.5 Billion (RMB 350Billion);
3. Y2015~Y2020 CAGR Target: >20%
2.4
National IC Industry Investment Fund Co.,Ltd
China Mobile E-TOWN
Capital China Development
Bank Capital
National IC Fund Structure
China
Tobacco
Shanghai
Guosheng CETC UNIS SINO IC Capital
Initia
tors
Financing
Institution
Large Scale
Enterprises
Social Capital
Increase In
Capital and
Share
Responses from International Players
• TSMC: intent to produce 28nm chips in China?
– Dec 2014, TSMC has plans to produce a small volume of mobile chips in China
made on its mature 28-nanometer manufacturing technology. Chairman Morris
Chang said “We are always expanding our capacity and have plans to move a small
part of our expanded capacity to (China)…If we don't go there, Samsung will”.
• UMC: got approval for 12-inch Fab in Xiamen.
– Jan 2015, UMC got approval from Taiwan's Investment Commission to invest in a
12-inch wafer plant in mainland China. UMC will spend US$450 million of its own
funds and more than US$260 million assigned by mainland-based Hejian Technology
(Suzhou). In the future, UMC is expected to invest even more in the mainland plant,
up to about US$1.35 billion.
• GF: Exploring opportunities in China.
• … …
Active M&A in IC Design Segment
• Dec. 2013, Tsinghua Unigroup completed the merger of Spreadtrum
(US$1.7 billion )
• Jul. 2014, Tsinghua Unigroup closed acquisition of RDA(US$907
million)
• Aug. 2014, Montage announced shareholder approval for acquisition
by Shanghai Pudong Science and Technology Investment Co. Ltd. in
a deal valued at about $600 million.
• Sep. 2014, Intel invested up to RMB 9 billion (about US$1.5 billion)
for a minority stake of approximately 20 percent of the holding
company under Tsinghua Unigroup, which will own Spreadtrum and
RDA.
M&A and CAPEX Investment in A&T Segment
36
May 2013, ASE acquired Toshiba’s Wuxi plant (US$11 million )
Dec. 2013, Texas Instruments acquired UTAC facility in Chengdu.
Jun. 2014, Siliconware started 3rd phase facility in Suzhou, and will add
advanced packaging in Suzhou.
Apr. 2014, Nepes(Korea) signed agreement for wafer package JV in Huai’an
Jiangsu.
Aug. 2014, SMIC and JCET established a Joint Venture in Jiangyin, to setup
12-inch wafer bumping and CP testing production line.
Sep. 2014, Wafer Level CSP Co., Ltd. mergered Gerad Suzhou.
Nov. 2014, TI announces to open 300mm wafer bumping facility in
Chengdu.
Nov. 2014, JCET is purchasing STATS ChipPAC ($780 million).
M&A and CAPEX Investment in A&T Segment
37
May 2013, ASE acquired Toshiba’s Wuxi plant (US$11 million )
Dec. 2013, Texas Instruments acquired UTAC facility in Chengdu.
Jun. 2014, Siliconware started 3rd phase facility in Suzhou, and will add
advanced packaging in Suzhou.
Apr. 2014, Nepes(Korea) signed agreement for wafer package JV in Huai’an
Jiangsu.
Aug. 2014, SMIC and JCET established a Joint Venture in Jiangyin, to setup
12-inch wafer bumping and CP testing production line.
Sep. 2014, Wafer Level CSP Co., Ltd. mergered Gerad Suzhou.
Nov. 2014, TI announces to open 300mm wafer bumping facility in
Chengdu.
Nov. 2014, JCET is purchasing STATS ChipPAC ($780 million).
Semiconductor Eco-system will grow in China
as the region becomes the center of:
manufacturing, market, application
SEMI China activities
SEMICON China 2015 Highlights
http://www.semiconchina.org
March 17-19, 2015,
Shanghai
• The largest global trade show and
Semiconductor industry gathering,
cover complete IC supply-chain.
• 10 plus Theme Pavilions and 30 plus
technology and investment conferences
reflecting the latest technical trends,
market demand and Capital flows.
• 90% visitors have purchasing authority
• Market, Technology, Investment,
Networking
SEMICON China 2015 Highlights
March 17-19, 2015,
Shanghai
• The largest global trade show and
Semiconductor industry gathering,
cover complete IC supply-chain.
• 10 plus Theme Pavilions and 30 plus
technology and investment conferences
reflecting the latest technical trends,
market demand and Capital flows.
• 90% visitors have purchasing authority
• Market, Technology, Investment,
Networking
http://www.semiconchina.org
SEMI China Committees
• SEMI China Advisory Board
• Package & Test Committee
• Equipment & Material Committee
• LED Committee
• Logistics Committee
• Secondary Equipment Committee
• Wearable Device Committee
• PV Advisory Committee
• PV Standard Committee
• HB-LED Standard Committee
• Touch Screen Committee
• … …
2014 SEMI China Member Activities
Time Program Venue Time Program Venue
March SEMI China Logistics Committee Xi'an Sumsung Programme Communication Meeting
Shanghai July SEMI China HB-LED Standards TC Autumn Meeting 2014
Harbin
March SEMI China PV Standards TC Spring Meeting 2014 Shanghai
Sept. SEMICON Europa "Innovation Village" First Show Grenoble, France
March SEMI China HB-LED Standards TC Petition Meeting San Jose Sept. 2014 Beijing International Microelectronics Symposium
Beijing
April SEMI China Logistics Committee meeting with Xi’an Hi-Tech Industries Development Zone CBZ Custom officials
Xi'an September “SEMI China Smart Wearable Device Exhibition Area” on 15th Western China International Fair
Chengdu
April SEMI China/ICMTIA Business Mission Japan Tour Japan September SEMI China Intelligent Wearable Industry Seminar Chengdu
May SEMI China HB-LED Standards TC Kick-off Meeting 2014
Guiyang October SEMI FPD Forum on 15th Western China International Fair
Chengdu
May The Sixth Working Meeting of SEMI China Packaging and Testing Committee
NMC Co. Ltd., Beijing
October SEMI China PV Monocrystalline Committee Shanghai
June SEMI China Logistics Committee Summer Meeting Shanghai October
The Seventh Working Meeting of SEMI China Packaging and Testing Committee
Suzhou
June SEMI China PV Standards TC Summer Meeting 2014 Baoding, Hebei October
SEMI China Touch Screen Committee Preparatory Meeting
Shanghai
June SEMICON West 2014 China Night San Francisco, USA
November The 29th International Technology Partners Conference(ITPC)
Hawaii, USA
June China OLED Industry Forum and Grassland Gathering Erdos Inner-Mongolia
December 2014 India New Energy Industry Investment Promotion/Communication Conference
Shanghai, China
July SEMI China IC Summer Camp Shanghai, China December SEMI China PV Standards TC Winter Meeting 2014 Changsha
July SEMI China Intelligent Wearable Devices Seminar Shanghai, China December 2014 China FPD Winter Industry Gathering Kunshan
July SEMI China PV Standards TC Autumn Meeting 2014 Dalian, China December China Equipment and Material Committee Beijing
July SEMI China Logistics Committee Xi'an Meeting Xi'an, China
SEMI China Equipment and Material
Delegation visit Japan 2014.4
“China Night” in San Francisco 2014.7
China equipment companies meet ST Micro 2014.10 SEMICON China
Supplier Search
Program 2014. 3
SEMI China: Build a “Global Industry
Community” in China