I talked Friday about the Chinese American Semiconductor Professionals Association (CASPA) summer event in my post CASPA: Innovation with Chinese Characters . Ajit Manocha, the CEO of SEMI, gave a short opening welcome and introduced Lung Chu, who is the head of SEMI China. He also has a CASPA connection, since he was CASPA Chair in 2002-3. Clearly, the center of gravity of semiconductor is moving more towards Asia these days. In March I went to SEMICON China in Shanghai to see for myself. See my post SEMICON China: Me and 70,000 of My Closest Friends . But the title is misleading. Lung told us that actually there were 91,000 attendees at this year's SEMICON China, about 25% up from forecast. The Global Semiconductor Industry He opened talking about how semiconductor revenue has grown to over $400B for the first time ever in 2017, and showed the top 10 semiconductor companies. Samsung moved up to #1, Since we were in an Intel auditorium, Lung emphasized he wasn't saying anything bad about Intel! A lot of the growth is in memory, and a lot of that growth is due to higher prices, not due to shipping more memories, "bit growth" as the memory industry calls it. Overall, memory grew 64%. Logic grew 9%. Another company with huge percentage growth, albeit from a smaller base, is NVIDIA, whose GPUs have become the silicon of choice for neural net training, including in the Summit supercomputer which just took the #1 spot in the Supercomputer 500 (for background on this list, see my post Supercomputers ) which has been held by Chinese supercomputers for several years. What about 2018? At the beginning of the year, people were optimistic. But all the forecasts have been moved up, some in the few days before SEMICON West, and are now in double digits at 15% or so. We are up 16.7% YoY in Q1, which is a record. There is a little less-good news: NAND fab push out by a couple of quarters (Lung didn't want to say who, but would say it is "the biggest memory company in the world" so I think we know who that is). There is uncertainty in China-US trade relations, and more uncertainty around FIRRMA, CIFIUS, and possible changes in export control. Some statistics on 2018 to date: Global semiconductor sales up 20% YoY in Q1 to reach $111B Foundry revenue up 9% YoY in Q1 DRAM rose against seasonality with 5.4% QoQ to reach a record $23B in Q1 Wafer shipments in Q1 increased 3.6% QoQ and 7.9% YoY to a new record Equipment billings soared 28% YoY to reach a record $16.7B in Q1 For 2019, growth is (at least for now) scaled back to 5% or so, but even so could reach $500B that year. The key fabs under construction worldwide are in the chart below: Many of the fabs are in China (but by no means all): China Semiconductor Industry There are a lot of fabs being built. Most of them, but not all, are being built in China, as you can see from the above graph (the years are the year construction started, so most of these fabs are still under construction and not yet operational). The ones in China are all over, in 4 main regions (see the map above for your tutorial on Chinese geography): Yangzi delta Beinjing/Tianjin/Bohai area Pan Zhujiang delta Central West China The fabs in China are a mixture of local Chinese fabs, and fabs being built by global semciondcutor companies, almost all of them in some sort of joint venture with a Chinese partner. China will have doubled its fab capacity by the end of this year, from 2010. The Chinese local companies have the most capacity, but it is not leading edge. In fact, China is 2-3 process generations behind the leading edge fabs globally. Growth Drivers AI and 5G are key enabling technologies to make everything else happen. Today there is a huge focus in VC funding for AI (it tripled in 2017). In China, the investment in AI startups is even bigger than in the US, possibly due to higher valuations in the China stock market. The picture is $1T in China, $400M in US, and $200M in the rest of the world. Facebook's CAPEX will be $14B this year vs $6.7B last year. China BAT (Baidu, Alibaba, Tencent) will increase CAPEX by 3-10X in the next 5 years. Of course, a lot of this is semiconductor content, especially since AI servers have higher content than vanilla (dumb?) servers. Of course, I'm sure everyone knows about the China National Guidlelines for IC Development. Lung said: Almost weekly people call us at SEMICON China saying we want semiconductor investment in our city. However, most China fabless startups are focused on low-end domesetic consumer products, and are small. Just 10% of them are over $15M. In manufacturing, China is 15% of global capacity, mostly in mature nodes except for the multinationals. On the demand side, China is the largest electronics consumer market (car, smartphones, TV, PC), which is one of the motivations for China to increase domestic content. I've said before that China spends twice as much on semiconductor imports as oil imports. Yes, some are re-exported again, but a lot are consumed within China so are genuine imports. Lung had a chart about NEV, (New Energy Vehicle) showing just how fast China is switching to electric vehicles. There was much more on this topic at the Ludwigsburg Congress I attended, which I covered recently in Trends, Technologies, and Regulations in China's Auto Market . Electric vehicles (both from a traction point of view, and from an ADAS point of view) are a discontinuity in the market and China is definitely trying to take advantage of this—not being able to build state-of-the-art internal combustion engines is not a disadvantage, and not having a lot of sunk cost in engine plants is an advantage. Summary China is strategically investing to create a domestic semiconductor industry to increase the amount of local content. Since its fab capacity is mostly non-leading edge and so the focus is on domestic consumption for now. But the plan is to work their way closer to the state-of-the-art. Longer term, their plan is to go from low-cost manufacturing to solution provider to innovation. Sign up for Sunday Brunch, the weekly Breakfast Bytes email.![]()
↧