'Society now says that investors are bastards, don't invest in chip companies, and China's chips are stuck on the neck. These discussions are very numerous'. Talking about the ZTE Incident and China's chip investment, Deep Ventures Chairman Ni Zewang said in a tone. Helpless.
Zhu Xiaohu, Managing Director of Jinshajiang Venture Capital, also had a deep understanding of this, and disclosed that he once planted pits. 'We did not vote for the chip. Before we voted several of them, we lost everything'. Zhang Suyang, managing partner of volcanic rock capital, said with emotion. 'Chip investment profits is equivalent to selling soap'.
In April 2018, the U.S. 'heavy penalties for ZTE' made this heavy blow, and we suddenly realized that we were so passive in core technologies such as chips. 'Over 90% of China's advanced chips rely on imports. High-end chips are the first Large imported products, followed by crude oil. The latter will cost about 200 billion U.S. dollars a year. 'The deputy head of the Central Inspection Unit 9 Ji Xiaonan had previously disclosed.
Faced with such a huge market gap, why commercial capital is not optimistic about the chip? Where is the difficulty of chip investment? What kind of enlightenment can we give us in the wake-up call of ZTE? What opportunities do we have in the next stage? Review China for more than 20 years History of investment, why do we have numerous model innovation companies with valuations of over 10 billion U.S. dollars, but rare giants of technological innovation?
In response to these problems, here are nearly 20 investment giants and entrepreneurs sharing and reflection. Why commercial capital is not optimistic about the chip?
Xiao Bing: A large number of scientific and technological innovation companies are waiting to be brought up to President Chen Caizhi
China is a latecomer and a catch-up society. Either companies or individuals tend to be short-sighted, and they can't wait to compete for it. Everyone is willing to do something that is immediate, rather than doing long-term accumulation.
In the past few years, a lot of money has been invested in business model innovation. However, a large number of technological innovation companies are waiting to be paid. When the money is needed, the organization neglects to invest in them. Everyone hopes to be effective quickly. It will be a fertilizer for a few months, one or two years. Listing, but ignoring the status quo in China, there are a large number of technological backwardness needs to be remedied. This is a place to reflect on.
Wei Zhe: 'More money, faster, more silly' Jia Yu Fund Founding Partner and Chairman
There was a joke before. A liar said to the B liar and came to us quickly. 'People are stupid, money is more, come faster'. I think the Chinese venture capital industry happens to be saying these words upside down.' More money, come soon, People are silly. How much is the money? In 2017, China's VC/PE industry raised as much as RMB 1 trillion in renminbi, and USD funds were between $60 billion and 70 billion.
However, this money has a finite number of years, ranging from 7-8 years to 10-12 years. Therefore, if there is a demand for speed, it will be necessary to make more money. Investors want speed, and entrepreneurs also want speed. Will definitely affect the investment.
Zhou Zhixiong: China's investors lack the patience to run partner of Triumph Ventures
Ten years ago, China's VC model copied the United States. Today, all of them involve the Consumer. When it comes to using money to solve problems, China is ahead. The development of the United States is decades longer than China. Its overall model, including the upstream and downstream systems, The formation can withstand relatively long development, and the patience of investors is even greater. The US capital market supports innovative technologies. Some companies may not even be able to list their income on the market, but China does not support it. This is a clear difference. In terms of rewards, China is entirely based on Consumers and has received excess returns. Investors naturally tend to tilt in that direction.
Where is the chip investment difficult?
Zhu Xiaohu: Investment and return are disproportionate to the managing director of Jinsha Jiang Ventures
We are not chip-casting. Several of the previous investments have lost everything, and they have also contributed to China's technological innovation. China's chip technology has several difficulties: First, most of the company is a single product. In the long run, returns There will be problems. Because the life cycle is short, it will soon drop to the average level. In addition, the company's initial investment is large, R&D personnel, and streamlining (manufacturing chips like a pipeline through a series of process steps) require high costs. The valuation is often not high, unlike Tencent, Ali can value four to five hundred billion US dollars, the chip's most successful may be one billion to two billion US dollars. For VC, this kind of investment is not in proportion to the return.
Zhou Zhixiong: Raising money, returning to the low executive partner of Triumph Venture Partners
Investing in the chip industry, raising a professional team costs a lot of money, but the return is a few counts in all categories. Now the Chinese market has great opportunities, but the challenge is even greater.
Zhang Suyang: Capital is a profitable volcanic stone capital management partner
The question of where to invest in the chip is either successful or unsuccessful. Unlike some model innovations, this path can be changed without delay. Second, most chips, even if they are successfully put into production, are basically the average profits. Speaking, you may prefer to invest in projects that generate more demand and can quickly recoup money.
Nowadays, many things in the market are more likely to generate returns and profitability than chips. As long as this phenomenon still exists, there are still few chips. This is a matter of choice for normal commercial companies because capital is profitable. It's a real problem. I think this is beyond reproach.
Yang Lei: Long chain of industry, managing director of complex Aurora Ventures
The difficulty with chip investment is that the industry chain is long and the process is complicated. The cost of a tapeout may be as high as several million US dollars. In addition, there are still labor costs. Capable chip engineers need at least five years of training. The training fee is also Millions of US dollars to start. At the same time, a team to make a chip at least 18 months.
Chen Qiyan: Technology Difficult to Turn into Productivity DaoCloud Co-Founder
Chips are heavily invested in assets. Private companies or state-owned enterprises are faced with huge financial risks, and there is no talent pooling effect. Therefore, investment in these matters often requires national will. The difficult part of this process is that a large number of social resources are precipitated to the state In the project, but ultimately the technology needs to be transformed into productivity, it depends on commerce. It is difficult to build on the original system. Reflection on the ZTE Incident
Li Feng: The chip problem is not only a founding partner of Feng Rui Capital, an economic problem.
Of the US$40 billion to US$50 billion chips produced in China, foreign capital accounted for about 80%. More than 51% of the factories produced were just like imported ones. They were only produced at home, adding up to less than US$300 billion, or about two trillion yuan. Production value. A dollar in the chip industry represents the value of the four-dollar industry chain, that is, the value of the industry chain from 8 trillion to 10 trillion yuan.
Of China's consumer electronic products with chips, 90% of the chips are imported. Qualcomm’s 2016 profit was $5.7 billion, of which 60% was contributed by China. Adding all the national data means that in this economic cycle, In five to ten years, we have 10 trillion industrial chain values and nearly 150 million jobs, which are related to the upstream and downstream links of this industry chain. In this cycle, if China does not solve this problem, it is not only an economic problem. It may be that There are social stability issues.
Liu Qin: Should pay active attention to the underlying technology innovation Morningside Capital Managing Director
How do you look at the chip and the underlying technological innovation? I think we must return to the nature of business and actively focus on the underlying technological innovation.
In the past, China used the market for technology, missing out on the development of the chip in the 1970s and the development of the PC in the 1990s. In 2000, it merely caught up with the window of innovation in the Internet model. But today, China has the opportunity to use the market to create technology. Timing is right. Our talent and capital have the opportunity to create original technology on the same starting line, relying on China's strong market size. At present, China's investment opportunities gradually enter the deepwater area. Looking forward to the next 20 years, the challenges are great, but the opportunities still make us full of confidence. .
Xiao Shuilong: To invest in technological innovation, Shen Xixin, chairman of the board of directors
I think it is really time for venture capitalists to pay more attention to technological innovation. Because core innovation has vitality and competitiveness. Pattern innovation has passed, but there are still more technological innovations, including biology, AI, and the chip industry. Wait. Investment still has to sink, LP doesn't understand, but we have to stick to it. Only in this way can we earn more.
Yang Xiaodong: To establish his own eco-premier President of Fidelity Investment China
I think the recent ZTE incident is just the beginning of trade friction. From now on, ZTE will happen one by one. We want to build our own ecology, hope that the country can provide (growth) soil in terms of taxation, intellectual property, etc., while putting money By giving VCs to entrepreneurs, not university professors, VCs will find people who want to change the world.
First of all, now that so many people are making chips, it feels a bit big leap forward. Second, VC really doesn't turn these people who have ideals and want to change the world into so-called capitalists. Third, I don't really invest in the soil at the moment. Look good, because everyone is swarming to do this thing.
Yang Ligong: Within five years will break the blockade on the chip Citigroup Risk Analysis Director
It is estimated that in about five years, we will break the blockade on the chip in some areas. The biggest impetus must come from the capital and the national industry fund, which is the result of the joint efforts of both parties.
Wu Xingkun: China's Disruptive Chips Still Need 5 Years of President of Optoelectronics
An upstream chip company lost 35% on the day of the ZTE incident because they were important suppliers for Huawei and ZTE. The company was founded in 2009 and is a US-listed company. Accuracy is subversive rather than improved. More domestic chips are now substitutable, replacing relatively simple chips in the midstream and downstream. At present, it will take at least five years for China to find subversive, and the market can use it. On the chip.
Yuli Li: Cannot be satisfied with model innovation and short-term benefits. Source Star Capital Management Partners
In the past 30 years or so, China has had many model innovations in entrepreneurship or investment in the development based on the Internet. However, future developments will surely change from model innovations to technological innovations. In the past, we did not realize it, or realized it, but it did not cause it. Highly valued. The most core chips, sensors, etc. must be imported from abroad, but the real core technology can not be bought. This core-limited event, to thank Trump to the Chinese people have alarmed. We can not just be satisfied With model innovation and short-term benefits, investing in and developing China's core technologies and building projects and industries with truly low-level core technologies are crucial to the long-term stability of China.
Zhu Qing: A founding partner of Light Capital Capital, a good project that boosts the underlying technology
The real underlying technology investment is a long-term issue. The ZTE incident has alarmed us and no single group can be left alone. We need venture capital agencies to work together with the entire capital market to boost good projects with low-level technology.
Liu Wei: Short-term friction, long-term cooperation Baidu venture capital CEO
Now that China’s capital has invested a lot of model innovations or 'application innovations', with such a drive, China’s first time has reached a point where it has the ability to compete with the United States on the new architecture, and Chinese companies have the ability to Technical fields and US companies are fighting for the development of new standards. How to limit Chinese investment in the United States? Many advanced things in the United States are still sold to Chinese applications. Otherwise, he cannot use this cycle to accelerate development. I think short-term friction is Yes, but long-term cooperation is inevitable.
Where are the chip investment opportunities?
Zhu Xiaohu: Artificial Intelligence Chips Should Capture Preemptive Position Jinsha Jiang Venture Capital Managing Director
Any major industry is cyclical. After a big new platform comes up, the company that comes out first must be a hardware company. With regard to artificial intelligence chips, China still has an opportunity. Once chips are put into a platform, new companies will have a hard time doing it because if they compete After your opponent takes the lead in the market and amortizes equipment costs, there is no way you can compete because the cost curve is far behind the competitors unless you rely heavily on government subsidies and support.
Yang Lei: Chinese chip companies want to 'cross-dimensional' competition Aurora Capital's managing director
It is not difficult to make a chip, but it is very difficult to make a high-performance chip. It is even more difficult to achieve a product yield of more than 95%. A chip company wants to establish a foothold that requires at least 20 million U.S. dollars at 20 million U.S. dollars. Below, everyone fights for money. More than 20 million fights are all kinds of skills.
The most important thing for a startup company is the founder. A founder who has no assurance about the product can hardly bring it out. Looking back at our hard technology investment, we also made the mistake of obsessing with the academic school at the very beginning: Technology and The distance between real industrial applications is very large. Now we prefer to really touch the established team in the industry.
At present, the status quo of the global chip industry is that one end is a highly-flexible NVIDIA GPU, and the other is a low-power but not flexible Google TPU. I think the opportunities in the future will be in the middle of both ends. Enterprises must find the right balance among them. My suggestion is that China's chip companies, even if they are doing the same market, are better off taking the road different from the big companies. There must be a kind of 'cross-dimensional' competition.
Wu Yenan: Domestic semiconductor companies want to break through two paths Ding Hing Quan Partners
The first is to rely on a strong market terminal to support and nurture, let it enter the virtuous circle as soon as possible; the other is to enter the subdivision area, quickly become bigger and stronger to occupy the market.
To grow up, domestic semiconductor companies must have some special paths. It is impossible to copy American companies. In the semiconductor company's investment, it is necessary to find a technically outstanding team, provide it with certain market support, and make it quickly available in the market segment. Bigger and stronger. With sufficient accumulation, it begins to spread to the international market.
Li Haifei: Artificial Intelligence Upstream Hardware and Software Applications Have Great Potential Guoji Investment Managing Director
Artificial intelligence is the door to a real productivity revolution. This door is already open. By 2020, the artificial intelligence industry will bring at least RMB 5 trillion or even RMB 10 trillion (market) scale. This will also drive the development of a large number of upstream hardware and software applications. Such as upstream machine learning chips, optical VCSEL chips, MEMS (micro-electromechanical systems), etc.
Wang Yumin: The future of compound semiconductors is very bright
After the end of Moore's Law in integrated circuits, how to continue to develop integrated circuits, an inevitable trend is to find new materials, such as compound semiconductor materials. Intel predicts that by 2030, compound semiconductors will occupy 60% of the entire semiconductor chip market, The future of compound semiconductors is very bright.
Han Yan: In 20 years, global Chinese talent will return to China's founding partner
The media said that China only has model innovation, but we underestimate its ability to innovate. I don’t think that China does not have talent. I see the opportunity is that in the next 10-20 years, China’s global talent will return. In the underlying technologies such as AI, Chinese talents account for a large proportion in the world.
Ling Daihong: Investors Should Pay More Attention to Founding Partner of Dann Capital in the Chip Area
In the near term, China is talking about chips, but investors should take a rational view. Unlike 2C industry, who has strong capital and strong executive power, anyone can rush out. Chips need decades of effort. Hard technology investment , It's a decade and a decade of grinding a sword. Unlike the 2C industry, it's not so sexy. It's a long marathon. However, like Foxconn returning to A shares, it shows the government's signal: China is extremely eager for hard technology. For people, more attention should be paid to this area.
Zhang Suyang: Real AR chip can generate high profits in short-term and mid-term
Investing in chips for a period of time, unless it is a true AR chip, such as a good neural network 30 layers, 60 layers, 90 layers, etc. can be well superimposed, a lot of application software can be put in, and a piece of chip can be solved. Maybe Produce high profits in the short to medium term. Other things even if you make, that is, the average profit or zero profit state. The zero profit state is not really zero profit, but in the chip area is to obtain the same profit as selling soap. This situation will Affecting business investment behavior. Advice to investors?
Xiao Bing: Return to Investment Source Yuanda Chen Caizhi
All kinds of investment strategies that wrap their coats, peeling their coats, the core is nothing but arbitrage and speculation. The future trend is like, everyone is also very confused. The market changes quickly, the policy is always changing, how to deal with it? I think it is still necessary to return Invest in the source, invest in something that can see long-term value, and do long-term industrial research and research. Really valuable things persist for 5 years, 10 years, the return on investment will not be bad, do not chase short-term hot spots, do not follow the short-term policy Go, keep a calm heart to look at investment.
We often overestimate the present and underestimate the future. To believe in the future, the power of value is the power of time. To believe in the fruits of long-term and arduous struggle, do not trust the results of short-term arbitrage. The results may be, but accidentally, it is not worth it. We study.
Ni Zewang: Returning to the heart of the beginning and sticking to the value investment deep venture capital chairman
Nowadays, society says that investors are bastards, and you don't invest in chip companies. As a result, China's chips are stuck on the neck. Now the whole society is keen to say that it is going to invest in chips. In such a confused era, I feel that I must return to my heart. Thinking about how to stick to value investment, including chips, is the same. We must keep in mind the basic laws of the market economy. We cannot afford to conquer the world. Second, all technologies, especially original technologies, are not just relying on money to be successful. Work hard together.
Wei Zhe: Looking at the heights, founding partner and chairman of Depth Jiayu Fund
The advice for Chinese entrepreneurs and investors is to look at heights and depths. If we only look at breadth and speed, there will be a large number of unicorn dead bodies waiting for us in the near future.
Liu Ye: Emphasis on the Deputy General Manager of Goldwind Investment and Control of Overtaking and Overtaking
Like in this kind of import substitution opportunity, we must consider the product cycle. Now that the integrated circuit, there are also Moore's Law. Investment so much, why China did not come out? I think we should pay attention to the logic of changing lanes and overtaking, which in the new energy vehicles The field has been fully verified.
Zhang Zhang: Software makes me more worried than the chip company's chairman
After the ZTE incident, we discussed more about the replacement of domestic chips. I think the more irreplaceable part is the software, which is the operating system. If the chip can find alternatives, it may not have any alternative for the Google operating system. I do software and the Internet. From my point of view, the monopoly of the software industry by US companies is far beyond hardware, which makes me even more worried.