[Taiwan Media: Why did mainland Chinese semiconductor companies losing money most of the time not catch up with Taiwanese companies? Recently, Taiwan’s “World Magazine†issued a document to discuss semiconductor manufacturing companies in the mainland and Taiwan.
SMIC is the world’s fourth-largest professional wafer foundry after TSMC, Greenfield and UMC. However, according to statistics of data company ICInsights in 2017, the top two companies accounted for 70% of the global market share. Although SMIC ranks fourth, its market share is only 6%.
In particular, when SMIC was still struggling at 28nm, TSMC’s 7nm chip started trial production in April 2017. This means that TSMC's technology has at least far ahead of SMIC's three generations.
So, SMIC, which has lost money for most of the time since it was built in 2000, has gone through nearly 20 years. Has the technological gap with TSMC still not been shortened, or has it even drifted further and further away?
Highly competitive, unable to build on the local market
"World magazine" quoted industry insiders saying that there are two reasons for the gap between SMIC and TSMC's two companies for at least five years.
On the one hand, the first pot of gold, such as Huawei, which has become a climate in the mainland, comes from highly protected and low-tech domestic markets. However, the semiconductor industry chain is highly globalized, and it has characteristics that most customers are less sensitive to prices, which makes it difficult for SMIC to do the same.
"World magazine" also used the example of bitcoin which has recently been hot. “Although Bitland and other mining chip makers are purely Chinese companies, as a leader in local companies, SMIC’s business opportunities for mining are 'visible and can't be eaten', and all orders from manufacturers are flooded to the opposite side of TSMC. ."
According to the financial report of TSMC in the first quarter of 2018, 9% of the company’s revenue comes from mining and the scale is as high as 750 million U.S. dollars. This figure is already close to the SMIC's total revenue for the first quarter.
Taiwan Media also stated that SMIC actually wants to do this business. At the latest SMIC press conference, the SMIC technical team leader said, "We also hope to do this business."
For SMIC's failure to take down the Bitcoin mining business, Taiwan Media believes that SMIC's process technology can not keep up with mining demand.
"The mining chips have extremely high computational performance and they all use processes below 28 nm. However, although SMIC's 28-nm (high-performance version) has been mass-produced, the yield rate has not been able to increase, and naturally it is not favored. â€
Now, with the tightening of supervision, the Bitcoin market is no longer hot. There is not much profitable space for mining with the 28-nanometer process. New generation of mining chips have now quickly withdrawn, and they have captured 16-nm or less processes. Taiwan media quoted a high-level statement from SMIC saying that since it spent too much R&D energy and time at 28nm, SMIC has lost all market opportunities.
Local competition, unable to form industrial clusters
On the other hand, “World Magazine†also believes that there are certain institutional reasons behind SMIC’s slow progress.
“Because the mainland is vast in size, the industry policy of semiconductor development under the guidance of the government needs to go through the process of 'central formulation and local implementation'. However, there are competitions between local governments, various provinces are rushing to issue policy support, and billions of funds are being built at any time. Demand semiconductors, such as SMIC, which has two 12-inch plants in Shanghai and Beijing each separated by a thousand miles, and two 8-inch plants in Shenzhen and Tianjin, will not only make it difficult to form a semiconductor industry cluster, but also make management Complex, and will lead to the power of various localities, all kinds of background shareholders, each have their own opinions, people and horses, which evolved into the worst results of SMIC's internal factional struggles frequently, the effectiveness of nature is not good."
Taiwan media also said that semiconductor manufacturing is particularly difficult, and some people must be willing to burn money for a long time, but it will not often interfere; in addition, leaders also need to have very strong personal capabilities, such as the chairman of Taiwan Semiconductor Manufacturing Co. Zhang Zhongmou.
Zhang Zhongmou
In addition, "World magazine" also said that in 2014 after the "National Integrated Circuit Industry Development Promotion Program" was issued, the mainland set up an industrial development fund to set up a demonstration microelectronics college in key universities and achieved immediate results. At present, in the area of ​​semiconductor international research, the exposure of mainland scholars has greatly increased.
In terms of specific industries, Taiwan Media has quoted industry insiders saying that "the mainland's semiconductor production industry is still at the creative stage and there is still a gap with the world's top technology."
Among them, the lowest level of technology threshold testing, the gap between the mainland and the world's leading technology is the smallest, three years ago, the acquisition of the Singapore Branch Jinpeng, Jiangsu Changjiang Electronics Technology, the scale of this area has now ranked among the top three in the world.
In the area of ​​IC design, Hass, owned by Huawei, had revenue of $4.7 billion for the entire year and became the seventh largest IC company in the world. The people in the industry interviewed by Taiwan Media have highly appraised Hass. He believes that the Kirin chip is very advanced. Just introducing the 7-nm process time point, it is already quite close to the world’s most advanced Qualcomm.
The wafer foundry of SMIC's main attack is the highest technical threshold in several semiconductor fields. "But SMIC has been chasing TSMC and has struggled, but its profitability is still meagre."
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