This move will push ZTE almost to the edge of the cliff. The core components of ZTE's mobile phone chips, baseband chips, memory chips, and optical components come from the United States' Qualcomm, Broadcom, Acacia, Intel, and New Flying Technologies technology giants. It is difficult to find alternatives with comparable performance, or even replace them at all. ZTE is one of the largest telecommunications equipment companies in China, but it has strong dependence on U.S. chip technology, and it will take a long time to achieve domestic substitution. The incident reflects a serious 'core-less' problem in the domestic communications industry.
China's chip market accounts for more than 50% of the world's total, with some chips accounting for 70% to 80%, while 90% depends on imports. Domestic chips can only supply about 8%. In 2016 alone, China's total chip imports amounted to nearly 1.5 trillion yuan. Yuan renminbi is nearly double the amount of crude oil imported in the second place.
Ye Tianchun, director of the Institute of Microelectronics of the Chinese Academy of Sciences, said: 'We do have shortcomings in chip design, manufacturing, etc., especially the manufacturing process is relatively weak. Some of our core technologies and key equipment have not been fully mastered.' At present, China is vigorously developing artificial intelligence. Technology, and one of the core technologies of artificial intelligence is the AI chip. At present, high-end chips still rely on imports, which means that China's artificial intelligence technology will also be subject to people. Take ZTE as an example, its high-end chips are totally dependent on imports, ZTE faces The situation is a common challenge that China's electronic communications industry needs to face.
How to break through the bottleneck of the industry and turn from a big chip country to a strong chip country? It has always been a thorny issue for the Chinese government and industry. China has made some attempts for independent innovation, but it has not achieved results, such as the sensational 'Hanxin'. After being confirmed as a major scientific fraud, another domestic chip 'Lonkyo' is also making slow progress in technology and market. High-end chip development requires long-term technology and talent accumulation. In the short term, independent innovation faces enormous challenges.
Instead of building a car behind closed doors, it is better to introduce advanced technology and R&D teams to jointly develop high-end chips. Israel is a leading global semiconductor industry, and is also the only chip power country in the world that has no major restrictions on China. China may wish to 'send' long-distance, Israel, or Will become an important source of chip technology and talent in China.
Israel Semiconductor Industry Overview
Israel’s semiconductor industry has always been ahead of the world, with numerous world-first technologies such as the first mobile phone, the first PC processor, the first Intel Pentium processor, the baseband chip of Motorola, the Bluetooth chip of Texas Instruments, Sandisk’s Flash memory technology, Microsatellite communications chips, are all developed in Israel.
Almost all of the world's leading chip companies have built R&D centers in Israel. Apple, Broadcom, Qualcomm, Samsung, Huawei, Texas Instruments, LG, Hitachi, Marvell, KLA-Tencor and other large companies are all engaged in research and development activities in Israel.
In 1974, Intel convinced its Israeli employees to establish the first R&D center outside the United States in Israel. As of now, it has four R&D centers in Israel and directly employs tens of thousands of employees, of which 60% are R&D personnel. Engaged in high-end chip R&D. In 1979,
The world’s first IBM 8808 processor based on Microsoft’s operating system was successfully developed in Israel. Since then Pentium, Celeron, Core, SNB, Ivy Bridge and other major CPUs have been developed in Israel. Intel Israel’s annual export volume Nearly 4 billion U.S. dollars. Intel has invested more than US$26 billion in Israel, including its US$15.3 billion acquisition of Mobileye, an assisted driving technology company based in Jerusalem. The number of Israeli companies investing in the company exceeds 70. Intel will also invest more in Israel each year than in the future. One billion dollars.
Israel currently has more than 150 chip design R&D companies and more than 30,000 chip R&D engineers. The amount of exports created each year accounts for more than 22% of Israel’s total exports. Therefore, Israel’s export statistics have for a long time separated the export of chips.
Yair Shamir, managing partner of Catalyst Fund, who served as CEO and director of several high-tech listed companies, told the author that the semiconductor industry is very cruel and that Israelis can quickly develop new products. This is why many Israeli chip design companies are vulnerable to Important reasons for the acquisition of international semiconductor giants. After many Israeli companies were acquired, their products and brands were quickly eliminated. Only the R&D personnel were retained. Israeli entrepreneurs withdrew their large amounts of income and invested in high-tech industries. There are still many Israelis. High-quality semiconductor investment opportunities.
The picture shows the author Peng Xiangmo (left) and Yair Shamir.
The major international chip giants have competed in Israel
In 1964, Motorola established the first semiconductor R&D center in Israel, marking the start of Israel’s semiconductor industry. Motorola’s Israeli team developed the world’s first mobile phone, after which Motorola’s R&D center in Israel was mainly engaged in the development of communication chips and its software. Motorola also has a number of venture capital investments in Israel. It invested in eight Israeli companies in one and a half years.
The latest generation of Apple’s mobile phones is being developed at its R&D center in Herzliya, known as Israel’s Silicon Valley. The center employs more than 1,000 R&D personnel. Apple acquired several Israeli companies, including PrimeSense, a 3D sensing chip technology company. The company is an important technology provider of Microsoft X-box products. In an interview with John Y Srouji, senior vice president of hardware technology for Apple, he said frankly: Apple cannot leave Israel.
British semiconductor company ARM acquired US-based chip security company Sansa for $90 million in 2015. It is mainly used in the Internet of Things (IoT). Amazon acquired an Israeli chip design company in 2015 and is now deeply involved in chip R&D. It is developing AI chips.
Broadcom was founded by Henry Samuel, an American Jews. In addition to building an R&D center in Israel, Broadcom has conducted a number of investments and mergers and acquisitions. Qualcomm has invested in a number of Israeli chip companies in recent years, with more than 3 mergers and acquisitions alone. Samsung acquired a chip design company in Israel as early as 2007. In 2017, it established a chip-based automotive cyber security center in Israel through its subsidiary Harman. At the same time, it established an AI R&D center in Israel and Israel. Communications-related companies have invested a lot. Texas Instruments has successively acquired three Israeli chip-related companies in 1999, and later acquired National Semiconductor Corporation and its Israeli research and development subsidiary. Currently, it is still conducting research and development of chips and related technologies in Israel.
In addition to the above chip design companies, many peripheral equipment suppliers also have R&D facilities in Israel, including Applied Materials, Curis Sofa, and others. There are also many Israeli semiconductor companies that cannot be underestimated, such as Mellanox, Altair, Orbotech ( (To be acquired by KLA-Tencor), Tower (establishing a joint venture in China) has a significant influence in the global semiconductor industry. Other smaller companies that are chip suppliers to many technology giants are too numerous to mention. .
Israeli chip R&D industry advantages
The advantages of Israeli chip R&D companies include the following:
The first is the rapid delivery capability. The timely delivery of product design and production is critical to the semiconductor industry. The Israeli R&D team has a rapid R&D capability and can deliver design and products to customers in any country in the world in a relatively short period of time. Israel’s rapid delivery capability benefits from the Israeli’s global vision and the rapid response capabilities developed by the military.
The second is cutting-edge R&D capabilities. The open vision and innovative thinking of Israeli engineers are very helpful in overcoming the special challenges in the chip R&D process, especially in dealing with low power consumption, high frequency and small size. For example, Intel is in Israel. The engineers developed the chip to meet the upgrade needs of the communications industry in the next 5 to 10 years. Israeli engineers also developed the world's smallest nanobook - the Nano Bible, the smallest nanowire - three times thinner than the wires in the microchip.
The third is rich experience. Many Israeli engineers have extensive knowledge and experience in many fields, such as wireless communications, data encryption, high-speed transmission and homeland security. These knowledge are derived from the experience of military service. Because of the small Israel has gathered R&D centers of the world's leading technology companies, and experienced Israeli engineers from different companies have a deeper understanding of the industry's world-leading technology.
Fourth, capital support. With its international leading performance, the Israeli chip industry has attracted the favor of Israel’s domestic and overseas capitals. Nearly 13% of the venture capital investment in Israel’s technology industry has been invested in the chip industry, and many Israeli investors are born. In the chip industry, the industry is very proficient.
The author once requested U disk inventors. Dov Moran, Israel's semiconductor industry leader, used three words to summarize the advantages of the Israeli semiconductor industry. He used three 'entrepreneurial spirits' in succession! Indeed, the Israeli entrepreneurial spirit in the high-tech industry is Obviously, he founded a number of high-tech companies and he is currently engaged in high-tech investment.
Israel or China's chip industry breakthrough
China has long been constrained by the Wassenaar Arrangement, and it is difficult to obtain true overseas sophisticated technology. The 33 states parties to the Wassenaar Arrangement all restrict Chinese exports of technology including semiconductors and equipment. Israel Not a party to the Wassenaar Agreement and not bound by the agreement. Ilan Ofer, Head of Corporate Strategy at Orbotech, told the author that Israel is currently the only minority country in the world that has no major restrictions on China, and that Israeli chip design companies are everywhere. Are all.
Although Israel once opposed the abandonment of arms sales to China’s early-warning aircraft, the semiconductor industry is not part of the military industry. The Israeli government has no technical restrictions on China in this regard, and Israeli chip companies have focused their attention on China’s largest market in the world. For Israeli companies, cooperation with Chinese companies is strategic. However, there is a huge difference in business culture between the two countries. With language barriers, Israeli companies also love and hate the Chinese market. For some really powerful For Chinese companies, if they are prepared for the long term, choosing the right Israeli partner will inevitably generate great value.
Chinese companies investing in chip R&D in Israel should avoid two misunderstandings: Firstly, the act of building an R&D center directly into Israel is something that Chinese companies need to avoid. Because as a Chinese company, it is very difficult for Israel to attract the best talents to join in. The lack of environmental and team management capabilities, unless there is a very strong local strategic partner to be successful; Second, in Israel's mergers and acquisitions need to take a more low-key gradual investment program, you can invest in shares, and then gradually realize the acquisition. Because the United States It is Israel's best ally. The US government may block it by pressure on the Israeli government. In addition, after the acquisition, it is not necessary to rush to carry out technology transfer. Technology can be left in Israel, and full use rights and right to information can be maintained.
Cooperation with Israeli high-tech companies includes investment, mergers and acquisitions, technology licensing, and commercial cooperation. In order to obtain true core technology and R&D capabilities, M&A is undoubtedly the only way. Israeli companies are relatively small and M&A deals Not much, after the acquisition can be used as a long-term R & D center in Israel. Once a strong Israeli R & D team, will be able to greatly enhance our domestic technological capabilities, so as to gradually get rid of dependence on the semiconductor industry in Europe, America, Japan and South Korea.