Our reporter Zhou Zhiyu reports from Shenzhen
Recently, the chip has become a red, hot word, sending the semiconductor industry and companies to the forefront. Last year's global business review we sorted out the current competitive landscape of the international semiconductor industry. This issue continues to focus on the leading global semiconductor industry in South Korea and Taiwan. They develop the history, current situation and gain/loss experience of the semiconductor industry. (Li Yanxia)
In 2017, the semiconductor industry created a new record.
George Brocklehurst, director of research at Gartner, an international research organization, said that this record is Samsung's push to take Intel (52.78, 0.80, 1.54%) out of global semiconductor revenue. Intel has been the world’s largest manufacturer for 25 consecutive years since 1992. The name's name gave way. Gartner's latest statistics show that in 2017, global semiconductor revenue totaled 420.4 billion U.S. dollars, an increase of 21.6% from 344.5 billion U.S. dollars in 2016.
In addition, according to statistics from IC Isights and other agencies, from the point of view of revenue, South Korea holds two seats among the top three semiconductor companies in the world, and Samsung and SK Hynix are ranked one and three respectively. Samsung, SK Hynix in 2017 Significant increase in revenue is mainly related to higher prices caused by shortage of chips.
Since Samsung established a semiconductor research and development laboratory in the 1980s, the development of the Korean semiconductor industry can be described as 'inspirational'.
In less than 40 years, South Korea's semiconductor industry started to grow from a deserted forest to a giant of the semiconductor industry at the start of more than a decade at the start of the United States and Japan. It was inseparable from intensive technical assistance and the government’s strength. Protection and corporate 'death'.
Precipitation: The model of 'government + big consortium'
South Korea's semiconductor industry started with technology. After about 20 years of precipitation, it completed its own technology accumulation in chip design and processing technology.
In 1959, LG's predecessor 'Kingsing Society' was developed to produce Korea's first vacuum tube radio, which is also considered to be the origin of the Korean semiconductor industry. However, at that time, Korea did not have independent production capacity, but only imported components. For assembly.
In the mid-1960s, U.S. companies such as Fairchild and Motorola began investing more and more in low-cost labor-power countries such as Southeast Asia to reduce their production costs, and South Korea benefited from this trend. Only stay at the economic level.
The OECD (Organization for Economic Cooperation and Development) pointed out in a report that for the subsidiaries of these US investors, South Korea is only an 'enclave' and has not played any role in the technological progress of South Korea. 'They only specialize in simple transistors. Assembled with ICs, used for export, required materials and production equipment are imported'.
In the 1970s, Japanese companies such as Sanyo and Toshiba started investing in South Korea. But until the early 1980s, the semiconductor industry in South Korea was still very limited. It was a simple, labor-intensive process. Assembly node.
With the changes in market conditions in the external world in the 1970s and the increase in wages in South Korea, the export ratio of light industrial products in South Korea has dropped sharply, and foreign debt has also risen to dangerous levels. The Korean economy has been threatened.
To this end, the Korean government announced the 'Heavy Industry Promotion Program' (HCI Promotion Program) in 1973, aiming to establish a self-sufficient economy through the development of heavy industry and chemical industry. In 1975, the Korean government announced six years of supporting the semiconductor industry. The plan emphasizes the localization of electronic components and semiconductor production.
The South Korean government also organized a DRAM co-development project called 'Official and Civil One', which is to develop DRAM industry through government investment.
In the process of semiconductor industrialization, the Korean government has promoted the 'government + consortium' economic development model and promoted the efficient integration of 'funds + technology + talent'. In this process, the Korean government will also be large-scale aviation, steel, etc. Giant companies are privatized, assigned to large consortia, and provided to consortiums with measures known as 'ex-gratia'.
The Economist commented in a 1995 article that the development of South Korean industry in the 1980s benefited from the HCI promotion program. Because such a huge resource is concentrated in a few financial groups, they can quickly enter the production of capital-intensive DRAMs. And ultimately overcome the huge financial losses in the early stages of production.
Beyond: The Rise of Samsung
1983 is the historical turning point of the Korean semiconductor industry.
The entry of the Korean consortium led the semiconductor industry to enter the era of large-scale integration (VLSI) production. These included companies such as Samsung, Venus and Hyundai (later renamed Hynix Semiconductor and acquired by the SK Group). This achieved qualitative change in Korean industry. ——From simple assembly production to precise wafer processing production.
In the 1980s, Samsung and Hyundai’s consortium were all looking for the future business areas. Ultimately their goal was to transform from an industrial base to a more high-tech oriented industry. When Samsung decided to enter into large-scale integrated chip production through its electronics business. At that time, Hyundai decided to use chip production as a way to realize its diversification into the electronics industry. The subsequent participation of the Venus Agency allowed the largest three consortiums in South Korea to participate in VLSI production.
Samsung's development of the semiconductor industry is a condensed history of the Korean semiconductor industry.
The former Samsung Group CEO Lee Byung Chul decided in February 1983 to make a large-scale investment in memory chip production. This was considered a very bold decision because South Korea was still a simple assembly production base at that time, 1983. In the same year, the share of wafer processing in semiconductor manufacturing was only 4.3%.
According to Samsung’s official strategy, Samsung Electronics suffered from frequent delivery of imported chips from Japan. All of the above factors prompted Li Bingzhe to try to enter the VLSI chip business.
Samsung has developed a detailed plan according to which about 50% of Samsung's total semiconductor products should be DRAM. By focusing on carefully selected DRAM fields, economies of scale and cost competitiveness can be achieved.
Later, SST International was established in Silicon Valley and became a technology outpost for Samsung. SST International (renamed with Tristar Semiconductor Co., Ltd.) made significant contributions to Samsung's product development, and the products successfully developed by SST International were transferred to Korea. The parent company SST, used for mass production, plays a crucial role in Samsung's technology development.
In 1983, Samsung built its first chip factory in the Gyeongsang district of Gyeonggi-do, and began the following series of actions. Samsung Electronics first purchased Micron from the company that encountered funding problems at the time (47.58, 0.96, 2.06%). 64K DRAM technology, processing technology was acquired from Sharp Corporation of Japan. In addition, Samsung also obtained Sharp's 'Complementary Metal Oxide Semiconductor Process' license agreement.
In the process, Korean companies such as Samsung have gradually become familiar with incremental process innovations. With the long-term experience of these companies in reverse engineering, South Korea's semiconductor industry has entered the fast track of development.
Shortly after selecting DRAM as the main product, Samsung successfully developed 64K DRAM in November 1983. Technically, the Korean semiconductor industry has achieved a significant leap from relatively simple LSI technology to cutting-edge VLSI technology. Thus, 1983 The year marks the beginning of the Korean VLSI chip era. It is undeniable that in the initial stage, foreign technology licensing played a crucial role in the development of Samsung's products.
Subsequently, Samsung Electronics established a modern chip factory in 1984 for the mass production of 64K DRAM. It was exported to the United States for the first time in the autumn of 1984. It successfully developed 1M DRAM in 1985 and achieved Intel's 'Microprocessor Technology'. agreement.
Since then, Samsung has continued to invest in DRAM, and the Korean government has also fully cooperated. By the Korean Institute of Electronic Communications' KIST, led by the Korean Ministry of Science and Technology (MOST) management, in conjunction with Samsung, LG, Hyundai and South Korea six universities, 'official “Industry and Academies” tackled 4M DRAM technology together. The project lasted three years, R&D expenses reached US$110 million, and the South Korean government took up 57%. Then the Korean government also promoted the cooperative development project of 16M/64M DRAM.
In the 'Semiconductor Industry Revitalization Plan' implemented from 1983 to 1987, the South Korean government invested a total of 346 million U.S. dollars in loans and inspired 2 billion U.S. dollars in private investment, which greatly promoted the development of the Korean semiconductor industry.
In 1987, another opportunity appeared in the world semiconductor market, which originated from the semiconductor trade conflict between the United States and Japan and the subsequent political regulation. After 1985, the increase in Japanese DRAM makers’ market share was considered as a sacrifice of the United States. In the interests of producers, the trade conflicts between the United States and Japan are increasing.
Japan first announced the implementation of the Semiconductor Trade Agreement (STA) with foreign semiconductor manufacturers, and the United States government announced in March 1987 that it imposed anti-dumping duties and retaliatory measures on Japanese products containing Japanese chips.
In the end, Japan promised to increase chip prices by reducing DRAM production. However, the growth in demand in the US computer industry at the time caused a serious shortage of 256K DRAM in the global market. This provided an important window of opportunity for Korean 256K DRAM manufacturers.
Since then, South Korea has been catching up. Samsung completed 4M DRAM chip design in 1988, R & D faster than Japan 6 months later, and then Samsung took advantage of Japan's economic bubble burst, Toshiba, NEC and other giants significantly reduce semiconductor investment opportunities, increase investment , The introduction of Japanese technical personnel. And in 1992 developed the world's first 64M DRAM, more than Japan NEC, becoming the world's largest DRAM manufacturer.
Gambler: Countercyclical Investment
Going beyond Japan to become the world’s largest DRAM maker is just the first step for Samsung to lead the Korean semiconductor industry to the world’s top echelon.
After 1995, Samsung launched many 'anti-period law' price wars, making most of the DRAM manufacturers go bankrupt, and gradually formed the status of only a few monopoly markets in the DRAM field.
Lin Jianhong, a research manager at Jibang Consulting's Tuobai Industrial Research Institute, told 21st Century Business Herald that the semiconductor industry needs to invest a lot of capital expenditure every year for the development of equipment and technology. Samsung is an integrated company type, even if the memory market is sluggish, it can still be Through other business departments to inject funds. This makes Samsung gradually become a semiconductor industry giant.
For example, when Samsung introduced 64K DRAM in 1984, the global semiconductor industry entered a downturn, and the memory price plunged from US$4 to 30 cents per tablet. Samsung’s current production cost was US$1.3 per tablet, which means that each Selling a piece of memory Samsung will lose a dollar.
At the low tide, Intel withdrew from the DRAM industry, and Japanese companies such as NEC significantly reduced capital expenditures. Samsung, like the gambler, was generally crazy overclocking, investing in counter-cyclical investments, continuing to expand production capacity, and developing larger-capacity DRAMs.
By the end of 1986, Samsung Semiconductor had accumulated a loss of US$300 million, and the equity capital was completely in short supply. However, the turnaround took an immediate turn. In 1987, the signing of the Japan-US Semiconductor Agreement made DRAM memory prices rise. Samsung also filled the gaps in global semiconductor market demand. Profit, from the contrarian in the past.
From 1996 to 1999, Samsung once again resorted to the 'anti-period law', but Hitachi, NEC, Mitsubishi's memory department was overwhelmed, was stripped by the parent company, and Toshiba announced that it will no longer produce general-purpose DRAM since July 2002. , Japan's DRAM only left Elpida.
For example, at the beginning of 2007, due to the global DRAM demand surplus, superimposed the 2008 financial crisis, the price of DRAM particles plummeted from US$2.25 to US$0.31. Samsung used 118% of the company’s total profit in 2007 for DRAM production expansion, which caused DRAM prices to fall further. Break cash costs and material costs.
In this offensive, the German manufacturer Qimonda declared bankruptcy in early 2009. Japanese manufacturer Elpida declared bankruptcy in early 2012. Samsung's market share further increased. The giants in the global DRAM sector only have Samsung, Hynix and Micron.
The impact of this price war is still continuing. DRAM has been in the period of stable stock-shortening prices from the second half of 2016 to the first quarter of 2018. During this period, Samsung’s chip sales reached 69 billion U.S. dollars, becoming the largest in the world. Chip makers.
In an interview with 21st Century Business Herald on May 3rd, Wang Yanhui, Secretary-General of the China Semiconductor Investment Union, stated that when the brand development was not smooth, South Korean companies such as Samsung did not think that they would need to go to OEM, but continued to invest. This is the reason why South Korea is able to produce global leading chip brands such as Samsung and Hynix.
How to maintain the advantages of the first tier
Wang Yanhui pointed out that South Korea's semiconductor industry is beginning with the industry transfer, under the government-led development of its own brand.
In the process of developing the semiconductor industry in South Korea, the Korean government is very supportive of the industry, investing heavily in R&D, and protecting after production.
Since 1990, the investment in the Korean semiconductor industry has risen. From the perspective of R&D investment, R&D investment in the semiconductor sector was approximately US$8.5 million in 1980 and US$900 million in 1994. Patent technology also rose from 708 at the end of 1989 to 3,336 items in 1994.
In 1994, South Korea introduced the "Semiconductor Chip Protection Act." Since then, the Korean government has also designated the chip industry and technology as the core technology that affects the country's competitiveness, and is committed to highly protecting technology and property rights.
The huge semiconductor industry has also developed Samsung Electronics and SK Hynix as its leader. IC manufacturing companies, semiconductor equipment companies and semiconductor material companies have been working in layers. The huge semiconductor industry chain constructed through outsourcing and OEM has formed the Yongren Group. , Kasei, Icheon, etc. Semiconductor industrial clusters support South Korea's semiconductor industry chain.
After Korea's semiconductor industry has entered the first echelon of the global semiconductor industry, South Korea still hopes to maintain its own advantages, not only through the 'BK21' and 'BK21+' programs, but also to provide precision, special support to universities, research institutes or institutes. In 2016, the Semiconductor Hope Fund was launched to invest in semiconductor-related companies to focus on the development of new technologies, especially the storage of new technologies.
This series of policies also basically continues the 'government + large consortium' industrial policy, encourages the integration of enterprises and universities, cultivates talents for the chip industry, and maintains South Korea's advantages in the semiconductor industry.