In the face of unfavorable factors such as the new crown pneumonia epidemic, China, as one of the most dynamic regions for the development of the global integrated circuit (IC) design industry, still achieved good results in 2020. According to the data of the IC Design Branch of the China semiconductor Industry Association, the sales of China’s IC design industry in 2020 is expected to be 381.94 billion yuan, a year-on-year increase of 23.8%, and the global share is expected to reach 13%. At the same time, the problems of low concentration and insufficient innovation capability of my country’s IC design industry still exist, and there is still a long way to go to become bigger and stronger. How to seize the opportunity of this round of global supply chain restructuring in the future will be the main issue facing my country’s IC design industry.
Not afraid of the epidemic, the growth rate of IC design industry exceeds 20%
Wei Shaojun, chairman of the Integrated Circuit Design Branch of the China Semiconductor Industry Association, pointed out in his speech at the 2020 Annual Meeting of the Integrated Circuit Design Branch of the China Semiconductor Industry Association (ICCAD2020) that the sales of China’s integrated circuit design industry in 2020 are expected to be 381.94 billion yuan, higher than the 2019 annual meeting. 308.49 billion yuan increased by 23.8%, and the growth rate was 4.1 percentage points higher than the 19.7% of the previous year. It is expected to account for nearly 13% of the global integrated circuit product sales revenue.
In 2015, my country accounted for only 6.1% of the global chip market; in 2020, this proportion is expected to increase to about 13%. The sales scale of the design industry directly reflects that the position of China’s integrated circuit industry in the world is rapidly improving.
The design industry is the leader of the integrated circuit industry and has a strong driving effect on the development of the entire industry. Among them, small and medium-sized IC design companies are the most dynamic innovation entities.
According to statistics, in 2020, 289 IC design companies are expected to have sales of more than 100 million yuan, an increase of 51 or 21.4% from 238 in 2019; 29 IC design companies with more than 1,000 employees, an increase over the previous year 11. The growth of sales and personnel scale shows the further expansion of enterprise scale, with stronger market competitiveness and anti-risk ability.
Wei Shaojun pointed out that the achievements made by my country’s IC design enterprises in the field of high-end Chips are particularly obvious. Although the domestic general-purpose CPU still has some gaps compared with the world’s most advanced level, it has changed from “basically unavailable” 10 years ago to “fully available” today.
The application of domestic CPU began to shift from the dedicated field to the open market field, which is an important step with milestone significance. The domestic embedded CPU has achieved the same stage competition with foreign products, from the previous special-purpose-based development to today’s general-purpose CPU, with annual sales reaching hundreds of millions.
In addition, domestic semiconductor memory has achieved zero breakthroughs, three-dimensional flash memory and DRAM have entered mass production, and the technology is close to the international advanced level. Domestic FPGA chips have entered the communication and complete machine market in an all-round way, playing a decisive supporting role at critical moments. In the field of domestic EDA tools, following the entry of analog full-process design tools into the market to compete, a series of important single-point tools have also been formed in the digital circuit process. After several years of hard work, I believe that my country can also have its own digital circuit full-process design tools.
Supply is still a shortcoming, and imports exceed US$300 billion again
Although a series of achievements have been made, the problems existing in my country’s integrated circuit design industry cannot be ignored either.
The first is that the supply capacity is still insufficient. Data show that in 2019, my country imported 444.3 billion integrated circuits, worth US$304.1 billion, and imported more than US$300 billion in integrated circuits for two consecutive years; exported 218.5 billion integrated circuits, worth US$101.5 billion, with a trade deficit of US$202.6 billion. “Strong demand and insufficient supply” will remain a long-term challenge for my country’s integrated circuit industry.
Secondly, the low industrial concentration has not been improved for a long time. With the advancement of capital, the number of integrated circuit design enterprises in my country will further increase in 2020. According to statistics, there will be 2,218 IC design companies in 2020, 438 more than last year’s 1,780, with a growth rate of 24.6%. However, there were 1,862 small and micro enterprises with less than 100 employees, accounting for 87.9% of the total. The proportion of the total sales of the top ten design companies in the total sales of the entire industry has fallen below 50% again, and the threshold for entering the top ten design companies has not increased. A large number of small and micro enterprises mainly face the low-end market, with low barriers to entry, many competitors, serious homogeneity, and increasingly meager profits in the fierce price war. These situations are not conducive to the healthy development of IC design companies.
Finally, the ability to innovate is not strong. The foundation of the long-term sustainable development of the industry is still not firm. Dai Weimin, chairman and president of VeriSilicon, pointed out that in 2020, the achievements of the design industry are related to the special environment such as the new crown pneumonia epidemic, which has its own particularity. In general, the product innovation capabilities of my country’s integrated circuit design enterprises are still insufficient, and they have not made much achievements in product innovation, and have not yet gotten rid of following and imitating.
Crisis breeds new opportunities, we must seize the opportunity of global supply chain restructuring
Although there are unstable factors such as Sino-US trade friction and the new crown pneumonia epidemic in the market this year, the crisis has created opportunities and the changes in the development environment have also provided a rare development opportunity for China’s IC design industry. Chen Ping, deputy general manager of TSMC (China), pointed out that the new crown pneumonia epidemic has had an impact on the global supply chain, and Sino-US economic and trade frictions have also caused unstable factors, but this has also led many terminal manufacturers to increase their stocking efforts, which has increased the number of chips. demand.
At the same time, since China took the lead in stabilizing the epidemic, the global supply chain is tilting toward the Chinese market. In addition, with technological advancements such as 5G, AI, and the Internet of Things, the era of pervasive computing is coming, and the demand for chip computing power is rapidly increasing. The occurrence of these situations is a rare opportunity for China’s IC design industry, and it is also one of the important reasons why China’s IC design industry still achieves good results despite the impact of the epidemic in 2020.
“For integrated circuit companies, they should seize the important opportunity of global supply chain restructuring, actively expand market space, and consolidate customer base.” Wei Shaojun pointed out. IC design is in the upstream of the integrated circuit industry chain, and is a key link in leading product definition and product innovation, and plays a decisive role in chip performance, cost and function realization. We should neither underestimate the pressure of the outside world nor overestimate our own abilities. We should work hard for another 10 years, and China’s IC design industry will surely achieve fruitful results.
Small and medium-sized IC design enterprises are the most dynamic innovation entities, but the industrial concentration of my country’s design industry is too low, and a large number of small and medium-sized IC design enterprises mainly face the low-end market, and the homogeneity is serious. In this regard, Zou Zhengxian, chairman of Hexin Microelectronics, pointed out that start-up enterprises have a weak foundation and need a certain period of growth. Their development cannot rely solely on government investment but on the market. The integration of production, education and research should be continuously promoted to provide products for enterprise product development. Intellectual support to gain stronger market competitiveness.
In the face of unfavorable factors such as the new crown pneumonia epidemic, China, as one of the most dynamic regions for the development of the global integrated circuit (IC) design industry, still achieved good results in 2020. According to the data of the IC Design Branch of the China semiconductor Industry Association, the sales of China’s IC design industry in 2020 is expected to be 381.94 billion yuan, a year-on-year increase of 23.8%, and the global share is expected to reach 13%. At the same time, the problems of low concentration and insufficient innovation capability of my country’s IC design industry still exist, and there is still a long way to go to become bigger and stronger. How to seize the opportunity of this round of global supply chain restructuring in the future will be the main issue facing my country’s IC design industry.
Not afraid of the epidemic, the growth rate of IC design industry exceeds 20%
Wei Shaojun, chairman of the Integrated Circuit Design Branch of the China Semiconductor Industry Association, pointed out in his speech at the 2020 Annual Meeting of the Integrated Circuit Design Branch of the China Semiconductor Industry Association (ICCAD2020) that the sales of China’s integrated circuit design industry in 2020 are expected to be 381.94 billion yuan, higher than the 2019 annual meeting. 308.49 billion yuan increased by 23.8%, and the growth rate was 4.1 percentage points higher than the 19.7% of the previous year. It is expected to account for nearly 13% of the global integrated circuit product sales revenue.
In 2015, my country accounted for only 6.1% of the global chip market; in 2020, this proportion is expected to increase to about 13%. The sales scale of the design industry directly reflects that the position of China’s integrated circuit industry in the world is rapidly improving.
The design industry is the leader of the integrated circuit industry and has a strong driving effect on the development of the entire industry. Among them, small and medium-sized IC design companies are the most dynamic innovation entities.
According to statistics, in 2020, 289 IC design companies are expected to have sales of more than 100 million yuan, an increase of 51 or 21.4% from 238 in 2019; 29 IC design companies with more than 1,000 employees, an increase over the previous year 11. The growth of sales and personnel scale shows the further expansion of enterprise scale, with stronger market competitiveness and anti-risk ability.
Wei Shaojun pointed out that the achievements made by my country’s IC design enterprises in the field of high-end chips are particularly obvious. Although the domestic general-purpose CPU still has some gaps compared with the world’s most advanced level, it has changed from “basically unavailable” 10 years ago to “fully available” today.
The application of domestic CPU began to shift from the dedicated field to the open market field, which is an important step with milestone significance. The domestic embedded CPU has achieved the same stage competition with foreign products, from the previous special-purpose-based development to today’s general-purpose CPU, with annual sales reaching hundreds of millions.
In addition, domestic semiconductor memory has achieved zero breakthroughs, three-dimensional flash memory and DRAM have entered mass production, and the technology is close to the international advanced level. Domestic FPGA chips have entered the communication and complete machine market in an all-round way, playing a decisive supporting role at critical moments. In the field of domestic EDA tools, following the entry of analog full-process design tools into the market to compete, a series of important single-point tools have also been formed in the digital circuit process. After several years of hard work, I believe that my country can also have its own digital circuit full-process design tools.
Supply is still a shortcoming, and imports exceed US$300 billion again
Although a series of achievements have been made, the problems existing in my country’s integrated circuit design industry cannot be ignored either.
The first is that the supply capacity is still insufficient. Data show that in 2019, my country imported 444.3 billion integrated circuits, worth US$304.1 billion, and imported more than US$300 billion in integrated circuits for two consecutive years; exported 218.5 billion integrated circuits, worth US$101.5 billion, with a trade deficit of US$202.6 billion. “Strong demand and insufficient supply” will remain a long-term challenge for my country’s integrated circuit industry.
Secondly, the low industrial concentration has not been improved for a long time. With the advancement of capital, the number of integrated circuit design enterprises in my country will further increase in 2020. According to statistics, there will be 2,218 IC design companies in 2020, 438 more than last year’s 1,780, with a growth rate of 24.6%. However, there were 1,862 small and micro enterprises with less than 100 employees, accounting for 87.9% of the total. The proportion of the total sales of the top ten design companies in the total sales of the entire industry has fallen below 50% again, and the threshold for entering the top ten design companies has not increased. A large number of small and micro enterprises mainly face the low-end market, with low barriers to entry, many competitors, serious homogeneity, and increasingly meager profits in the fierce price war. These situations are not conducive to the healthy development of IC design companies.
Finally, the ability to innovate is not strong. The foundation of the long-term sustainable development of the industry is still not firm. Dai Weimin, chairman and president of VeriSilicon, pointed out that in 2020, the achievements of the design industry are related to the special environment such as the new crown pneumonia epidemic, which has its own particularity. In general, the product innovation capabilities of my country’s integrated circuit design enterprises are still insufficient, and they have not made much achievements in product innovation, and have not yet gotten rid of following and imitating.
Crisis breeds new opportunities, we must seize the opportunity of global supply chain restructuring
Although there are unstable factors such as Sino-US trade friction and the new crown pneumonia epidemic in the market this year, the crisis has created opportunities and the changes in the development environment have also provided a rare development opportunity for China’s IC design industry. Chen Ping, deputy general manager of TSMC (China), pointed out that the new crown pneumonia epidemic has had an impact on the global supply chain, and Sino-US economic and trade frictions have also caused unstable factors, but this has also led many terminal manufacturers to increase their stocking efforts, which has increased the number of chips. demand.
At the same time, since China took the lead in stabilizing the epidemic, the global supply chain is tilting toward the Chinese market. In addition, with technological advancements such as 5G, AI, and the Internet of Things, the era of pervasive computing is coming, and the demand for chip computing power is rapidly increasing. The occurrence of these situations is a rare opportunity for China’s IC design industry, and it is also one of the important reasons why China’s IC design industry still achieves good results despite the impact of the epidemic in 2020.
“For integrated circuit companies, they should seize the important opportunity of global supply chain restructuring, actively expand market space, and consolidate customer base.” Wei Shaojun pointed out. IC design is in the upstream of the integrated circuit industry chain, and is a key link in leading product definition and product innovation, and plays a decisive role in chip performance, cost and function realization. We should neither underestimate the pressure of the outside world nor overestimate our own abilities. We should work hard for another 10 years, and China’s IC design industry will surely achieve fruitful results.
Small and medium-sized IC design enterprises are the most dynamic innovation entities, but the industrial concentration of my country’s design industry is too low, and a large number of small and medium-sized IC design enterprises mainly face the low-end market, and the homogeneity is serious. In this regard, Zou Zhengxian, chairman of Hexin Microelectronics, pointed out that start-up enterprises have a weak foundation and need a certain period of growth. Their development cannot rely solely on government investment but on the market. The integration of production, education and research should be continuously promoted to provide products for enterprise product development. Intellectual support to gain stronger market competitiveness.
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