Dr. Shaojun Wei, Director Research Center for Mobile ...€¦ · Analog IC 193.17 31.77 67.72 88.47...

Dr. Shaojun Wei, Director

Research Center for Mobile Computing

Tsinghua University

May 10, 2016 GSA Global Leadership Summit (Shanghai) 3

1. Global IC industry maturing

2. The new normal of China IC industry

3. Innovation driven by both capital and technology

4. Conclusions

Agenda





4. Conclusions

Agenda


50th anniversary of Moore's Law

April 19, 2015, the 50th anniversary of Moore’s Law.

Moore’s law is really about people’s belief system, it’s not a physics,it’s about human belief, and when people believe in something,they’ll put energy behind it to make it come to pass.

—— Carver Mead, Professor of Engineering and Applied Science, Caltech


"Moore's Law" changing our lives

234 = ？17,179,869,184 What the numbers mean? Performance and speed every two years by doubling the number of

transistors on a chip. 2n，n=(2016-1965)*12/18。


-50.0%

-25.0%

0.0%

25.0%

50.0%

0.

500.

1000.

1500.

2000.

2500.

3000.

3500.

4000.

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Worldwide semiconductor industry sales were $335.2 billion in 2015, adecrease of 0.2% from $335.8 billion in 2014, a slowdown compared withthe 9.9% growth rate from the previous year. 1987-2015 In 28 years theglobal semiconductor industry CAGR of 8.69%, 2010-2015 CAGR of only2.36%, enters a low-growth phase.

Source：WSC 2015 & SIA

Semi. industry to grow at a slower pace

Revenue（$100M USD） CAGR（%）


Semiconductor industry maturing

Source：“China Investment Corporation”, Qatalyst Partners, June 2015


M&A Exacerbates


No. Acquiror Acquired Party Amount($100M)

1 Intel Altera 167.00

2 Avago Broadcom 370.00

3 Western Digital SanDisk 190.00

4 NXP Freescale 118.00

5 LAM Research KLA-Tencor 106.00

6 Dialog Atmel 46.00

7 ON Semiconductor Fairchild 24.00

Total 1021.00


Motivation of M&A






4. Conclusions

Agenda

May 10, 2016 GSA Global Leadership Summit (Shanghai)

￥100M

China IC industry had kept high speed growing in2015. According tothe statistics of CSIA, the total revenue was 360.9B RMB, growing19.7%.

2004-2015 China IC Industry development

China IC industry fast growing in 2015

Source: CSIA 2015

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015


The revenues and growth rates in each sector

China IC industry had recorded a fast growth in all the sectors in 2015. Theproportions of chip design and manufacturing steadily increase year by year.Manufacturing sector surprisingly recorded a highest growth.

Development in different sectors

982.5 1255.9 712.11234.4 1384 900.8

25.64%

10.20%

26.50%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0

200

400

600

800

1000

1200

1400

1600

Fabless P&T Manufacturing

2014 Revenue 2015 Revenue Growth Rate

Source: CSIA 2015

￥100M


Fact 1: Manufacturing fast growing

Sales (hundred million RMB) Growth Rate (%)

Sources: CSIA 2015

2008-2015 Development of China IC manufacturing industry

Under the guidance of “State IC Industry Development Initiative” andpushed by Big Fund, China IC manufacturing industry faces a new run ofspeedy growth. It’s expected to keep two-digit CAGR in the next 10-15years

392.7341.1

447.1 431.6501.1

600.9

712.1

900.8

-20%

-10%

0%

10%

20%

30%

0

200

400

600

800

1000

2008 2009 2010 2011 2012 2013 2014 2015

2008-2015CAGR = 12.59%

￥100M


3Q11

1Q12

2Q14

4Q15

1Q17

1Q19

4Q12

2Q13

2Q15

2Q14

1Q15

2Q13

1Q14

4Q14

1Q15

4Q11

2Q14

3Q17

3Q19

1Q17

1Q19

1Q17

1Q19

2Q15

2Q18

1Q19

Fact 2: Process tech. behind peer industry


Fact 3: Capacity highly demanded

China local market consumed $84billion integrated circuit productsin 2013. $42 billion or 50% wereproduced locally. Assume that thegross profit of chip design industrywas 40%, then the output value ofmanufacturing industry was $30billion. If the price of each 12 inchwafer was $3000 (actually $2700on average), annual productioncapacity was $30 billion/ $3000=10million wafers, that is 830,000wafers per month. If theproduction capacity utilization ratewas 90%, the monthly productioncapacity was about 930,000 pieces.Because the actual productioncapacity is about 20,0000 piecesper month, the gap reached730,000 per month.


Sales（RMB 1billion) Growth（%）

0.3 1.1 1.5 3. 5.76 8.1515.

23.427.6

34.2237.983

55.62.437

68.045

87.448

98.25

123.416

0%

75%

150%

225%

300%

0.00

35.00

70.00

105.00

140.00

1999 2001 2003 2005 2007 2009 2011 2013 2015

2000-2015CAGR = 45.68%

Fact 4: Design industry fast growing

Source：CSIA, IC Design Branch 2015

China IC design industry will keep the rapid growth, the CAGR will remainat 20% and higher. In 2016 the total revenue will hit RMB 150-160billionexpectedly.

The State of China IC Design (1999-2015)￥100M


Fact 5: Communication chips thriving

The number of ommunication IC companiesgrows steadily while analog IC and consumer ICare steady comparatively. The numbers ofcompanies in others areas changes a lot, andcompanies’ directions adjust frequently.

Except the rapid growth of communications, otherarea grow slowly at about RMB 10 billion, and GPS isabout RMB 2 billion.

No. of companies in each areas Revenues of each areas2011 2012 2013 2014 2015

Communication 72 75 85 109 157

Computer 47 77 81 58 51

Multi-media 67 72 71 98 93

Navigation 57 22 25 23 33

Analog IC 146 68 91 139 164

Power IC 68 63 99 115 86

Consumer IC 77 131 125 104 113

2011 2012 2013 2014 2015

Communication 93.22 191.22 311.20 411.05 597.76

Computer 59.95 72.20 106.07 91.98 88.45

Multi-media 86.57 57.64 87.75 89.11 84.29

Navigation 73.26 7.68 13.93 14.74 17.58

Analog IC 193.17 31.77 67.72 88.47 120.76

Power IC 86.64 32.23 84.37 95.30 85.44

Consumer IC 94.00 65.25 114.23 101.44 144.25

CommunicationComputerMulti-mediaNavigationAnalog ICPower ICConsumer IC

Source：CSIA, IC Design Branch 2015


Fact 6: Package & test steady growing

618.91

498.16

629.18

975.71035.67

1098.2

1255.9

1384.

-45.00%

-22.50%

0.00%

22.50%

45.00%

67.50%

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

2008 2009 2010 2011 2012 2013 2014 2015

Sales（ RMB 100Million ） Growth（%）

The Development of China Packaging and Testing Industry (2008-2015)

China’s packaging and testing industry keeps growing steady, and CAGRfrom 2008 to 2015 is 12.19%. Next few years, the growth of packaging andtesting industry will continue, but will be beyond the chip design industry.

Source: CSIA 2015

￥100M


0

175

350

525

700

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

USD

$(1

00

Mill

ion

)

Global China

Fact 7: Semi. Investment growing

Global and China Semiconductor Investment (2001-2015)

Under the guidance of the State IC Industry Development Outline, theinvestment of the National Fund and local funds grow aggressively, and itattracts international enterprises to take a part in. In the next 5 years, theamount of IC investment will more than USD 50billion in China, and 20% of it willcome from global partners.

$100M


Fact 8: IC imports remaining high

17021920

23132176

2307

325.7534.3

877.

608.6 693.1

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

2011 2012 2013 2014 2015

Export (USD 100Million) Import (USD 100Million)

Source: CSIA 2015

China’s IC import and exprot (2011-2015)

2015，IC imports hit USD 230.7 billion, grew 6% year-on-year, and is thethird year that imported IC over USD 200 billion. IC is the most valuableimport, the trade deficit is USD 161.39 billion. The next few years, ICimports will still remain high.


679.7

488.4379.7

126.7

710.8

469.4393.3

144.94.58%

-3.89%

3.58%

14.36%

-10.00%

0.00%

10.00%

20.00%

0

200

400

600

800

Import IC(unit) Import IC(Value) Export IC(unit) Export IC(value)

2015Q1 2016Q1 Growth rate

China IC industry development in 2016Q1

225.1 275.5 184.9283.9 302.6 212.1

26.12%

9.84%

14.71%

0.00%

10.00%

20.00%

30.00%

0

100

200

300

400

Fabless Package & Test Manufacturing

2015Q1 2016Q1 Growth rate

China IC industry continued to grow in 2016Q1. The total revenue hit 79.86BRMB, growing 16.5% comparing to 68.55B RMB in the same period of 2014.

The revenues (in ￥100M) and growth rates in each sector, 2016Q1

The import and export IC and values (in $100M), 2016Q1

Source: CSIA 2016





4. Conclusions

Agenda


IC Ecosystem

Talents

Techno. Product

Market

Capital Finance

Eco-system Policy

IC Industry

TopUnity Veteran

Cooperation Profession

SufficiencySufficient Capital

Place on Time

Reasonable RequirementAffordable Expense

VarietyVarious MeasuresAdaptive Development

ScrutinyReasonable Regulation

Excellence

Full FunctionUser Experience

DdifferentiationExcellent Service

Advance

Excellent PerformanceStable Reliability

Reasonable costDelivery on Time

Equity

Complementary advantagesHealthy Competition

Integrated ChainOrderly Link

Adoption

CoherentReasonable

OutstandingHigh Efficiency

Hugeness PromisingEvolution

Large CapacityLong Term


Capital

25

Strategy

Technology, capital and strategy

Technology


Balanced driven by technology and capital


Semiconductor investment easing

No. Acquiror Acquired Party Amount

1 Hua Capital OmniVision 19.002 SummitView Capital ISSI 7.643 JAC Capital NXP RF/Power 18.004 JCET StatsChipPAC 7.805 NF Micro. AMD assembly subsidiary 4.006 TSHT FCI 0.4067 Tsinghua Unigroup Powertech 6.00

No. Party Invested Promised Finished

1 SMIC 92.52 42.102 San’an 64.39 64.393 Silan Microelectronics 6.00 6.004 Nantong Fujitsu Microelectronics 18.07 18.005 Apex Technology 6.67 5.006 ZTE 24.00 24.007 AMEC 4.96 4.938 …

In $ 100M

In $ 100M

Total

$6.29 B

Big Fund

Promised ￥46.8 BFinished ￥28.5 B

Fund Investment ￥8.7 B (18.58%)


Innovation driving products upgrade

Computer and Network Semiconductor Memory

Smart Terminal (MP, TV, …)IoT & Smart Sensor


Investment in different stages

Setup

R&D

M&S

Enrich Products

Expansion

Maturity

M&A

StagesStarting Growing Maturing

Revenue: 0 – 100M USD Revenue: 100M – 300M USD Revenue: 300M – 1B USD

R&D Building supply chain Sales Service and support Angel investment 1–3 rounds of financing

Enlarging sales Cost control Strengthen service and support Enriching product line Introducing new technology and talents 1 – 2 rounds of financing

IPO Technology and product chain M&A Financing in capital market

Sufficient market share

Sufficient technologyreserve

Culture and management





4. Conclusions

Agenda


1. Global IC industry is maturing. M&A became more Active.Chinese capital’s participation in global M&A activities drawsattention from the peers in the industry.

2. China IC industry will continue to develop at a high speed butsome constraining challenges still need to be addressed before itcan cross the chasm.

3. The problem of under investment is getting addressed but thetechnology advancement still needs to follow.

4. Capital and Technology are the two wheels that drive theindustry. Only a balanced development can drive the industryforward. Besides M&A, China also needs to focus on R&D. Howto leverage the increased the capital investment to acquire themissing technology is the key issue.

5. Collaboration is a key issue. China IC industry has to learn how towork with its global partners.

Dr. Shaojun Wei, Director Research Center for Mobile ...€¦ · Analog IC 193.17 31.77 67.72 88.47...

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Transcript of Dr. Shaojun Wei, Director Research Center for Mobile ...€¦ · Analog IC 193.17 31.77 67.72 88.47...