Report: With the outbreak of ZTE and the focus of various industry capitals, the industrial chain with semiconductor development as its core is heating up.
When the Sino-U.S. trade war is about to announce a ceasefire, the sudden change of face of US President Trump will allow the upcoming twists and turns to surge again, impose a tariff of US$50 billion on China, and curb China’s investment in sensitive technologies.
Technology is the weight that the United States plays in this trade war. After the outbreak of the ZTE incident after the trade war, the US’s suppression of China’s technology has made more and more people wake up, including entrepreneurs and investors. .
Next hard bone
On the evening of April 16, 2018, the U.S. Department of Commerce issued an announcement saying that the U.S. government will ban ZTE (31.31 suspension of trading, diagnosis shares) from buying sensitive products from U.S. companies in the next 7 years. This led to the outbreak of ZTE. Behind the ZTE incident is China’s The overall backwardness of the semiconductor industry towards the United States. The 'China Core' has inevitably become the focus of many people's attention.
Following the acquisition of domestic chip company Zhongtianwei by Alibaba, another industrial power has entered the chip industry, the appliance industry. Both Gree and Konka have recently announced high-profile announcements to enter the chip industry. Among them, Gree Electric (46.58 -1.94%, diagnosis stocks) Chairman Dong Mingzhu said that even if it costs 50 billion yuan, it must be created. The latter is the establishment of the Semiconductor Technology Division and the formal entry into the semiconductor industry. Zhou Bin, president of Konka Group, said that it takes 5-10 years to become an international player. Semiconductor company ranks.
It's not surprising that 'Dung Sister Dong' made surprising headlines. The follow-up of Konka seems to make the outside world feel a different atmosphere. The home appliance industry must change its course. Lu Jianguo, chief engineer of the China Household Electrical Appliances Research Institute, said to the China Investment Network reporter. The outbreak of the ZTE incident touched on the most sensitive nerve of Chinese entrepreneurs - enterprise dignity.
Compared with smart phones and communication devices, home appliance products do not have a high requirement for chips. In the early years when Dong Mingzhu was interviewed, he was asked why he did not make chips. Dong Mingzhu admits: 'The chips are very cheap. A few dollars a. 'The outbreak of the ZTE incident made her wary. Although the chips are cheap, the technology is not cheap at all. The chip is the upstream supply chain of household appliances. Once it is controlled by people, it affects the whole machine manufacturing. It will always master the core technology. Gree as a slogan apparently did not master the core technology in previous years.
Lu Jianguo said: 'The Chinese home appliance industry used to be the state of the reformer and light parts. While the company was growing, it did not reinforce it in time. The unreinforced part included the chip industry.'
Mings Capital is one of the few domestic early investment institutions that have made achievements in the semiconductor industry. They are not only focusing on the chip industry, but also the larger semiconductor industry behind them. Matt has become an investment manager in the semiconductor industry. For 6 years, there is a unique understanding of the industry.
In his view, domestic semiconductor companies are fighting a technical battle. "Some semiconductor components still need to be imported. Some are already hard-boiled. It needs to be realized that at present, China manufactures semiconductor components. In the early days. '
Within the plan, it is not expected
The exploration of chips by the Chinese home appliance industry can be traced back to 1999. At that time, several home appliance giants tried to expand into the field of chips. For example, Haier established two IC companies and TCL Investment Chips in Beijing in 2000, and established the company. M&A Funds. In addition, Skyworth, Midea, and Changhong have both tried and made efforts in the chip industry. Gree and Konka are not the first home appliance giants to develop self-developed chips, but because of this Sino-US trade war瞩目.
When talking about the status of homemade chips, Matt said: 'At present, the domestic semiconductor industry has already crossed the stage of early technology accumulation. We have already achieved localization in relatively simple external devices. Even in sensor technology, we have achieved Leading and becoming a supplier of foreign famous brands. The development in the past 20 years is still obvious to all.
For home appliance companies now choosing to announce the news of entering the semiconductor industry, Lu Jianguo said that this is not a momentary rise. Obviously there are plans and preparations. It is understood that as early as 2017, Gree set up a microelectronics department to develop its own chips. .
For the home appliance industry, chips are just needed. Today, with imports still as the main channel, self-developed chips mean a vast market. The funding problems that have plagued the development of chips have also been effectively mitigated with the expansion of home appliance giants. .
In Matt's view, the manufacturing difficulty of the chip itself is not simply to make up for it. Semiconductor manufacturing, including upstream machinery and equipment, silicon-based materials and even adhesives, all need to be imported. 'We have a certain design capability, but the production capacity Relatively backward.
With the release of the China Zhizhi 2025 Plan, industrial upgrading led by the state is an important means for the development of the real economy. In 2014, relevant departments released the “Outline for the Promotion of National IC Industry Development” and set up a national integrated circuit. Industrial investment funds (large funds), focusing on supporting integrated circuit industries. Lu Jianguo believes that industrial upgrading has brought about rapid development of basic industries, which has increased the success rate of chip manufacturing.
'The household appliance industry has decided.' Lu Jianguo said: 'The Sino-US trade war has taken place, which has accelerated the completion of things that were still in the decision phase. It has promoted the attention of business leaders to the core technologies. It is now the most suitable time node to release chips. While demonstrating strength, the plan can also respond to national calls.
By contrast, foreign home appliance giants, such as Panasonic, Samsung, and General Motors, all have their own chip manufacturing capabilities in their hands. The development of chip research and development in China's household electrical appliance industry is just a matter of surprise. Home appliance giants can no longer afford this issue. Selective blind eyes.
As a technology-intensive industry, chip development has historically required time. Taking Huawei as an example, its research in the chip industry has been going on for more than a decade, and it has not yet become an international mainstream. To a large extent, chip development has a lot to do with it. Certainty.
'The design and development of a complete machine may be completed in a year or two, but a successful and mature chip will take many years, and the iteration will be very fast.' Lu Jianguo said.
Great times
With the outbreak of ZTE and the focus of various industry capitals, the industrial chain with semiconductor development at the core is heating up. Matt said: 'In the primary market, the speed of financing of semiconductor companies and the rise in valuations are very intuitive manifestations.'
'We firmly believe in the internal development of an industry and its own value, rather than simply looking at the short-term effect, and we believe that this boom will quickly recede and the industry will return to normal.' Matt said.
As a market-oriented organization, how to bring real returns to investors is the most important. Looking at the United States, the development of the semiconductor industry in South Korea can find that non-market funds, represented by state funding, can truly lead the rapid development of the industry. And the source of advancement.
According to the data, as of the end of 2017, the National Fund has invested in 49 companies and has accumulated a total of 67 projects for effective decision-making. The cumulative commitment of project investment is 118.8 billion yuan, and actual investment is 81.8 billion yuan, accounting for 86% of the total size of the first phase. 61%.
After the outbreak of the ZTE incident, there have been accusations that Chinese investment institutions did not pay enough attention to semi-conductor companies. Matt said: 'The US venture capital industry has rarely involved semiconductor investment as early as 2000. Coincidentally, the US venture capitalists The industry appeared earlier than China in 20 years. '
For China's investment industry, investment in semiconductors not only indicates large investments, uncertainties, and investment cycles of at least 10 years, but more importantly, with the development of the semiconductor industry, the industrial division of labor becomes more clear, and industry players are also increasingly The more concentrated, this relatively mature industry is not suitable for financial investors to enter. The semiconductor industry is no less costly than any Internet burning war.
However, this does not mean that the chip industry has no chance.
Matt believes that the 'semiconductor industry is moving from parallel integration to vertical integration. This is a spindle-type development cycle. Several years ago, a vertically integrated company represented by IBM had both chip design capabilities and its own factories. The whole machine is also their business. However, with the development of vertical integration to parallel integration, various enterprises in the highly refined and vertically fixed sectors have built a parallel world in which one computer uses products of several companies. But with Apple as the The representative company is rewriting the parallel worldview, it controls the whole machine, masters the system, and even self-developed chips. This is the signal that the industry is once again vertically integrated.
On the basis of full parallel integration, industry development efficiency has been unable to achieve optimal. If you have been living in a parallel world, only up to three companies in each vertical sector can survive, which means a huge challenge for entrepreneurs. .
However, once the parallel is broken, the opportunity of the startup company will also come.
When the tech giants focus their attention on enriching their ecology, fixed vertical segments will inevitably have the opportunity to incubate new giants. Even if they cannot become giants, they will have the opportunity to become the target of others' investments and acquisitions. At this point, financial investment People have a certain reliance on industrial investors.
For industry investors and financial investors, the investment chip industry needs to walk on two legs. In Lu Jianguo’s view, walking on two legs means that investment and mergers and acquisitions cannot be less. The former can maintain competitiveness for a long time. The latter can Realize rapid improvement.
Matt said: 'On the one hand, we need to invest in our own research and development. On the other hand, we must absorb a lot of talent and technology. The international blockade of China's core technology is still very serious.'
China has the world's largest consumer electronics market. At the global level, although the semiconductor industry has grown by single digits, with the development of this industry, there has been a trend of technology flow from the United States to South Korea. The Chinese market has the ability and opportunity to create A group of valuable companies. They will all be born in this era.