Under The "Lack Of Core": Dawan District Enters The Global Semiconductor Manufacturing Highland Competition

In the context of continuous "core shortage", the global demand for wafer foundry capacity is like a long drought. As the most important part of the semiconductor industry chain, chip manufacturing has been promoted to the national strategic direction by many countries around the world, and its importance can be said to be the global attention.

This also allows the wafer foundry industry to reach a new height of scale in 2021. According to the research of trendforce Jibang consulting, thanks to the demand for a number of terminal applications and the strong stock of various parts and components, the supply of wafer foundry capacity has been in short supply since 2020. All factories have raised the wafer price and adjusted the product mix to ensure the profit level. Despite the impact of external factors such as high base period and sudden power failure in the fourth quarter of 2020, the total output value of the top ten wafer foundry manufacturers in the first quarter of 2021 still broke the record high of a single quarter again, reaching 22.75 billion US dollars, with a quarterly increase of 1%.

In terms of revenue ranking, TSMC ranked first in the world in the first quarter with a revenue of 12.9 billion US dollars, with a market share of 55%; Samsung ranked second, with a revenue of 4.108 billion US dollars and a market share of 17%; United Power ranked third with a market share of 7%; Lattice core and SMIC ranked fourth and fifth in the world, both with market share of about 5%. It is worth noting that among the top ten, Huahong semiconductor and Shanghai Huali are ranked ninth and tenth respectively. Both belong to Huahong group. If calculated by combination, the total revenue of Huahong group in the first quarter will reach 600 million US dollars, ranking sixth, while the tenth place will be supplemented by Eastern high tech.

Although the stronger the "Matthew effect" is obvious, the pattern of wafer foundry and production capacity is still changing. On the one hand, from the perspective of enterprises, players on the field are throwing money, while the number of new players is still increasing. There are not only giants like Intel, but also domestic start-up companies such as Yuexin; On the other hand, from the geographical point of view, countries around the world support the semiconductor manufacturing industry frequently, and the future production capacity distribution is also quietly changing.

A person in the industry pointed out to the reporter of the 21st century economic report that the new regulations formulated by various regions are aimed at improving the ecology of the semiconductor industry and paying special attention to the manufacturing and production links. China has a huge domestic consumer market, especially Guangdong, Hong Kong and Macao Bay area, as an important manufacturing base in China, relying on the huge market space, is attracting more semiconductor talents and enterprises to make up for the shortcomings of semiconductor manufacturing.

In progress of wafer foundry expansion

In the global wafer production capacity shortage, continuous "core" reality, the major wafer factories are expanding production. According to the global foundry output value forecast of 2021 released by Jibang consulting, some manufacturers will expand their production capacity in 2021. It is expected that the output value of the overall foundry industry will reach a record high of 94.5 billion US dollars this year, with an increase of 11%.

Among them, TSMC and SamSung of the first echelon will strengthen the R & D, plant expansion and production expansion of 5nm and below processes to support the development of HPC related applications; In the second echelon, SMIC international, united power, lattice core, etc. mainly expand the mature processes of 14 ~ 40nm to support the huge demand for the change of communication technologies such as 5g, WiFi 6 / 6e, and multi application chips such as OLED DDI and cis / ISP. At present, SMIC's plan to build a new plant in Beijing is in progress, and there are also active expansion plans in 8-inch and 12 inch existing plants. Therefore, relevant funds can still be used for the procurement of non American equipment and the construction of new plants.

It is worth mentioning that due to the use of DUV integration equipment for processes below 45 / 40nm (inclusive), the capital expenditure is relatively high. Taking 45nm as the cut-off point, the expansion of production of technology nodes above 65 / 55nm (inclusive) is a more economic investment for the wafer foundry. As a result, the expansion of production in factories above 55nm or 8 inches is mainly to meet the needs of large-scale DDI, tddi and PMIC.

As can be seen, TSMC and Samsung, in addition to mature processes, have invested heavily in advanced processes, and have long had huge plans to expand production. For example, TSMC plans to significantly increase its annual capital expenditure to US $22 billion in 2021. Subsequently, TSMC announced that it would invest US $100 billion to expand the wafer plant in three years, and planned to invest US $2.887 billion to expand the 28nm process capacity of Nanjing plant, increasing the output of 40000 wafers per month, mainly for the production of automotive chips. According to the plan, the 28nm process capacity of TSMC Nanjing plant will be mass produced in the second half of 2022, and the full capacity target of 40000 Wafers / month will be achieved in mid 2023.

Samsung is more aggressive. It is reported that since 2021, Samsung has set up a "semiconductor vision 2030" long-term plan, with the goal of dominating the wafer foundry market in the next 10 years. Samsung's desire to compete with TSMC is fully demonstrated. At present, TSMC occupies half of the global wafer market, with a share of over 50%; Samsung is the second. In recent years, Samsung is ambitious, and its market share has gradually increased.

In addition, Intel is another variable in the wafer foundry market, which also affects the changes in the global pattern. In the semiconductor system, the IDM model represented by Intel once led the way. Amd founder Jerry Sanders once said in 1994, "the man who owns a fab is a real man." However, TSMC, founded by Zhang Zhongmou, has created a new business model of third-party OEM. Since then, chip design and manufacturing can become a separate business, which greatly reduces the threshold for start-ups who want to enter the chip industry. Companies such as Qualcomm, NVIDIA and MediaTek also take advantage of the situation. Now amd plans to enter the era of 5-nanometer CPU in cooperation with TSMC.

Now, Intel also wants to upgrade the original IDM model, not only to increase cooperation with third-party OEM, but also to invest in third-party OEM. After the new CEO took office, Intel announced its idm2.0 strategy, announced its entry into the wafer foundry industry, and planned to invest $20 billion to expand its wafer plant. On the financial side, Intel expects planned capital expenditure of $19 billion to $20 billion in 2021.

Semiconductor manufacturing competition

Since the beginning of this year, the United States, South Korea, Japan and Europe have intensively issued new policies to build the semiconductor industry chain. In May this year, the US Senate officially approved US $52 billion to vigorously promote the production and research of us semiconductor chips in the next five years. In terms of fund allocation, 39 billion US dollars are used for semiconductor production and R & D incentives, and another 10.5 billion dollars are used to promote the implementation of national semiconductor technology center, national advanced packaging manufacturing program and other R & D programs.

As early as June 2020, the US Senate proposed two new bills, namely chips for America Act and American foundries act, to promote the modernization process of American semiconductor industry《 The US wafer industry act proposes that the United States will invest a total of 25 billion US dollars into the chip manufacturing industry and defense chip manufacturing industry of each state.

With subsidies from the U.S. government, coupled with geopolitical factors, technology giants are also moving. Before the bill was proposed, TSMC, the leading foundry of wafer foundry, announced in May 2020 that it would invest US $12 billion to build a 5nm process wafer plant in Arizona, USA. In June 2020, lattice core, another foundry, also announced that it would acquire 66 acres of land near New York State, and expand its Fab 8 Fab 8 Fab Fab 8 Fab Fab 8 wafer fab 8 Fab 8 wafer fab 8 wafer fab 8 wafer fab 8 Fab 8 wafer fab 8 wafer fab 8 wafer fab 8 Fab 8 wafer fab 8 Fab 8 wafer fab 8 Fab 8 wafer fab 8 wafer fab 8 Fab 8 wafer fab 8 Fab 8 Fab 8 wafer fab 8 wafer. Recently, it has been reported that Samsung is considering the construction of ultra violet (EUV) OEM production line in Austin, Texas. It plans to start construction in the third quarter of this year and put into production in 2024. The new factory may introduce 5-nanometer process.

According to reports, South Korea has made a plan to spend about $450 billion in the next decade to build the world's largest chip manufacturing base; The Japanese government will commit to expand the existing 200 billion yen fund to support the domestic chip manufacturing industry and help boost the output of advanced semiconductors; According to the European Commission, 22 EU member states have jointly established a new semiconductor alliance to support Semiconductor R & D in Europe and reduce the EU's dependence on foreign suppliers. It plans to increase the EU's share of global semiconductor production from 10% to 20% by 2030. The EU is also focusing on requiring Intel, TSMC and Samsung to build factories in Europe.

In the face of the current situation of science and technology game and global supply chain being blocked in recent years, it has become a national strategy to build local industrial chain, especially chip manufacturing. Wafer manufacturing plants spend a lot of money. With the support of the government, all localities offer olive branches to manufacturers with chip manufacturing capacity, hoping to attract core enterprises to settle in. At the same time, the major chip manufacturers are also actively expanding production, so the choice of origin has become an important game point. In the future, with the introduction of production capacity, the global semiconductor industry pattern may change.

Counterpoint research, a market research firm, analyzes the logic (non storage) IC chip industry and predicts that the US chip capacity share is expected to increase from 18% in 2021 to 24% in 2027. By then, Taiwan's share of production capacity will fall to 40%.

At the same time, from the perspective of geographical distribution, counterpoint predicts that regional transfer of chip capacity will occur in 2027. TSMC is likely to invest more to reach the size of its Taiwan plant after the Arizona plant has achieved a capacity of 20000 units per month. In 2027, China's Taiwan and South Korea will account for 57% of the world's total chip capacity. Mainland China, however, accounts for only 6% of global production capacity because of its inability to purchase key production equipment.

An industry insider pointed out to the 21st century economic reporter that from the new regulations formulated by various regions, on the one hand, all parties want to improve the semiconductor industry ecology locally, especially focusing on the manufacturing and production links of TSMC, which accounts for half of the country. On the other hand, all countries hope to occupy the technological commanding height and compete for the key semiconductor technologies of the next era. For China, the challenges are enormous, but there are new opportunities, because China has a huge domestic consumer market.

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