Overview of China Semiconductor Industry
Allen Lu, Ph.D., SEMI China President
April 23, 2015, Invest Penang
Agenda
• Global and China Semiconductor Market
• Challenges and Opportunities of China
Semiconductor Industry
• Recent Government IC Initiatives
SEMI: global & professional
Semiconductor Industry Association
SEMI member HQ region
India
About 2000 members globally
Japan
23%
1%
Korea
Europe
CHINA
9%
320
Companies
14%
China
12%
16%
JAPAN
Americas
27%
EUROPE
T aiwan
12%
414
Companies
Singapore
2%
AMERICAS
KOREA
255
Companies
203
Companies
476
Companies
Total Members by Size
$5M - $25M
22%
$25M - $100M
6%
Under $5 M
67%
$100M - $500M
3%
$500M - $1B
1%
$1B - $2B
1%
Over $2.5B
> 1%
TAIWAN
215
Companies
INDIA
25
Companies
SINGAPORE
33 Companies
Global and China
Semiconductor Market
Semiconductor Industry:
Powered by the Applications
Mobile
Phone
PC
Mobile Computing,
Internet of Things
Semiconductor /Electronic Industry
Supply-Chain
2013
$1,412B
Electronic End Equipment
$306B
Semiconductors
Materials
$45B
Equipment
$32B
Source: WSTS/SIA, SEMI, and IC Insights
Forecast
2014
$38B
$47B
$325B
$1,488B
Global semiconductor market closely
correlated to GDP
1990-2014F Semiconductor Industry Growth versus
Worldwide GDP Growth
WW 4.6%
Semi Industry Growth
Global GDP Growth
4.7%
5%
50%
4.6%
42%
32%
29%
3%
2%
1%
40%
3.7% 34%
28%
3.3%
2.3%
10%
1.5%
2.1%
18%
1.7%
1%
9%
7%
7%
4%
4%
2%
-9%
-10%
-8%
10%
0%
-3%
-5%
0%
30%
2.8%
2.7%
20%
2.6% 19%
4%
3.4%
3.2%
2.5%
2.0%
4%
3.9%
3.4%
3.6%
2.5%
8%
4.0%
37%
Semi Industry Change
Worldwide GDP Change
4.1% 4.1%
3.7%
4%
4.3%
-10%
-20%
-1%
= Global Recession
Threshold
-30%
-32%
-1.9%
-2%
-40%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14F
Year
Source: IC Insights
7
Capacity Increase Slowing Down
Recent Equipment Spending Driven by Upgrading
Micron Feb 2014:
Industry bit supply growth slowing:
DRAM:
49% in 2010 to 24% in 2015
NAND:
74% in 2010 to 45% in 2015
SEMI World Fab Forecast:
Since downturn the industry
spends more money
on upgrading existing facilities
Average change rates
2003 – 2007
2011-2015*
Fab Equipment
18%
5%
Fab Capacity
17%
3%
* 2011-2015: excluding 2010 because
fab equipment growth was unusual high
Global Frontend Equipment Spending
TSMC Dominates Foundry Fab Investment
Source: SEMI World Fab Forecast, August 2014
Global Semiconductor Equipment Market
(Including A&T Equipment)
2014F
$B
2015F
$B
%
Change
Europe
2.49
3.68
48%
China
4.98
5.06
2%
North America
7.15
7.33
3%
South Korea
6.94
7.98
15%
SEA
1.66
2.05
23%
Japan
3.65
4.22
16%
Taiwan
11.57
12.27
6%
Total Regions
38.44
42.59
11%
Region
SEA
4%
China
13%
Europe
6%
Japan
10%
North
America
19%
Taiwan
30%
Korea
18%
2014F = $38.4 Billion
Totals may not add due to rounding
Source: SEMI
Global Semiconductor Material Market
(Including A&T Material)
2014F
$B
2015F
$B
%
Change
Europe
3.13
3.24
4%
Japan
17%
China
5.77
6.09
6%
N orth America
4.93
5.11
4%
North
America
11%
South Korea
7.17
7.64
7%
SEA
6.77
7.12
5%
Japan
7.40
7.47
1%
T aiwan
9.58
10.02
5%
T otal Regions
44.75
46.69
4%
Region
SEA
15%
China
13%
Taiwan
21%
Europe
7%
Korea
16%
2014F = $44.7 Billion
Totals may not add due to rounding
Source: SEMI Materials Market Data Subscription August 2014
China Semiconductor Industry:
Challenges and Opportunities Coexist
2014 Leading Imports to China
集成电
路芯片
2313
原油
2197
1057
铁矿石
液晶面
板
496
0
500
1000
Unit：$100M USD
1500
2000
2500
Source: China’s Customs
15
China’s Electronic Products Manufacturing
Drives Huge IC Consumption
Example of China’s Electronic Product Output in 2013
Output
(Million
units)
Growth
Rate
% of World
Output
Export
(Million
units)
Cell
Phone
1456
23.2%
81.1%
1190
LCD TV
122.9
7.2%
56.9%
54.6
Notebook
& Tablet
273
7.9%
70%
326.7
Digital
Camera
46.8
-33.1%
74.5%
41
Source –CVIA, Ministry of Information Industry of China, SEMI, May 2014
China Semiconductor Industry
Continuous to Grow
China IC Industry Revenue
45
40.5
IC P&T (USD Billion)
40
35
30
IC Manufacture (USD Billion)
34.2
IC Design (USD Billion)
IC Industry (Design+Manufacture+P&T)
16.4
25
21.3
20
16.4
12.6
8.6
10
0
17.9
15.1
16.2
9.7
9.3
15
5
17.7
29.9
6.7
2.4
3.3
4.3
3.0
3.4
2.2
8.9
3.9
2.3
7.9
7.3
6.4
4.2
2.8
1.5
8.3
6.7
6.6
5.2
3.0
5.7
3.4
5.0
4.0
5.4
8.1
9.8
13.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: CSIA, SEMI, SICA
Expanding 300mm Capacity in China
Company Location
Tech-node Capacity
(nm)
(K/month)
Products
Status
Huali
Shanghai
55
25
Foundry
Will add capacity to 35K/M
SK Hynix
Wuxi
29
130
DRAM
Production & Upgrade
Intel
Dalian
65
15
Chipset
Production
Total plan for Xi’an 1st phase:
100K/month
Production
Samsung
Xi’an
20
40
NAND
Flash
SMIC
Beijing
40
36
Foundry
SMIC
Beijing
40-20
-
Foundry
SMIC
Shanghai
40
14
Foundry
WXIC
Wuhan
45
9
NOR Flash,
Foundry
(Planned)
Construction. 5K－6K/M in end of
2014
Production and
expand to 14K/M in 2014
Production
Source: SEMI China, Oct. 2014
Key Local Semiconductor
Equipment Suppliers
Equipment
Company
Exposure & Write Equipment
SMEE
Photoresist Processing Equipment
Kingsemi
Etch Equipment
AMEC, NMC
Surface Conditioning Equipment
Thermal Process Equipment
Sevenstar, Kingsemi, ACM
Sevenstar
Ion Implant Equipment
ZKX
Thin Film Deposition Equipment (CVD/
Sputter/Electroplating/electro deposition)
NMC, Piotech
Inspection & Measurement Equipment
Grand，Raintree
CMP Equipment
Tianjin Hwatsing
Key Local Semiconductor
Material Suppliers
Material
Company
Wafer
Gritek, JRH, Simgui, Waferworks
Lithography related materials
(photoresist, developer, etc.)
Kempur, Ruihong
Sputtering Targets
KFMI, Grikin
CMP Slurry
Plating solution
Anji
Sinyang
Chemicals
Runma, Jingrui, Huayi
Special Gas
Huategas, Jinhong, Creditchem
Through government policy, special project funding, and efforts of
the industry, China’s equipment & material companies covered all
major process sectors
Global Semiconductor Industry Highly Consolidated
Top 20 Semiconductor Companies by 2013 Revenue
2013
Rank
Company
HQ
2013 Revenue
(in US Million)
2013
Rank
Company
HQ
2013 Revenue
(in US Million)
1
Intel
U.S.
48,321
11
Renesas
Japan
7,975
2
Samsung
Korea
34,378
12
AMD**
U.S.
5,299
3
TSMC*
Taiwan
19,850
13
Infineon
Europe
4,862
4
Qualcomm**
U.S.
17,211
14
Sony
Japan
4,869
5
Micron
U.S.
14,360
15
NXP
Europe
4,815
6
SK Hynix
Korea
12,970
16
MediaTek**
Taiwan
4,587
7
Toshiba
Japan
11,958
17
GlobalFoundries*
U.S.
4,261
8
TI
U.S.
11,474
18
Freescale
U.S.
4,007
9
Broadcom**
U.S.
8,219
19
UMC*
Taiwan
3,959
10
ST
Europe
8,014
20
Nvidia**
U.S.
3,898
* Foundry **Fabless
Source: IC Insights, 2014
Global Semiconductor Industry Highly Consolidated
Top 20 Semiconductor Companies by 2013 Revenue
2013
Rank
Company
HQ
2013 Revenue
(in US Million)
2013
Rank
Company
HQ
2013 Revenue
(in US Million)
1
Intel
U.S.
48,321
11
Renesas
Japan
7,975
2
Samsung
Korea
34,378
12
AMD**
U.S.
5,299
3
4
5
6
 Revenue：Top 20 account for 75% of worldwide.
TSMC*
Infineon
19,850
Taiwan
13
Europe
 Spending：Tope 5 account for 66% of all
Qualcomm**
Sony
17,211
Japan

R&D：Top U.S.
10 R&D expense
28.614 billion USD，more
than
Micron
NXP
14,360
U.S. rest companies.
15
Europe
sum of all the
**
SKCapacity：Samsung,
TSMC, Micron,
Hynix,
Toshiba,
Intel
Hynix
MediaTek
12,970
Korea
16
Taiwan
account for 43% of global capacity.
*
4,862
4,869
4,815
4,587
Toshiba
Japan
11,958
17
GlobalFoundries
U.S.
4,261
8
TI
U.S.
11,474
18
Freescale
U.S.
4,007
9
Broadcom**
U.S.
8,219
19
UMC*
Taiwan
3,959
10
ST
Europe
8,014
20
Nvidia**
U.S.
3,898
7
* Foundry **Fabless
Source: IC Insights, 2014
Top 10 Semiconductor Equipment Suppliers
Main Product Areas
2013 Revenue
($B)
2013
Market
Share (%)
Applied Materials
Thin film, Dry etch, CMP, ion implant,
metrology and inspection
5.46
16.2
2
ASML
Lithography
5.30
15.7
3
Lam Research
Dry Etch, Thin film, wafer clean
3.16
9.4
4
Tokyo Electron
Thermal processing, coat/develop
Track, dry etch, wafer clean
3.06
9.1
5
KLA-Tencor
Inspection & measurement
2.16
6.4
1.22
3.6
0.86
2.6
2013
Ranking
Company
1
6
7
Dainippon Screen
Coat/develop track, wafer clean
Manufacturing
Hitachi HighDry etch, metrology & inspection,
assembly
Technologies
8
Advantest
Test
0.85
2.5
9
Teradyne
Test
0.82
2.4
10
Nikon
Lithography
0.64
1.9
10.24
30.3
Others
23
Source: Gartner, 2014
China’s Equipment Company Revenue
and Global Market Share
Equipment Category
2013 Market Size
($B)
2013 Chinese Suppliers Sales
(Company 2013 Revenue：$M)
Market
Share
Exposure & Write
6.3
SMEE (Total 19): 19
0.3 %
Photoresist Processing
1.51
KINGSEMI（Total 27.4）: 21.9**
1.8 %
Etch Equipment
4.00
AMEC（Total 51.9）: 51.9
NMC (Total 32): 16**
1.7 %
Surface Conditioning
Equipment
1.84
ACM（Total: 15.8）: 15.8
Sevenstar（Total 138.7）: 4.1
KINGSEMI（Total 27.4）: 5.5**
1.4 %
Thermal Process Equipment
0.79
Sevenstar（Total 138.7）: 6.4
0.8 %
Ion Implant Equipment
0.81
CETC Beijing Electronic Equipment Co.
-
TF：CVD
2.83
Piotech （Total 12.9）: 12.9**
1.53
NMC (Total 32): 16**
0.5 %
1.1 %
Other
1.24
/
-
CMP
0.74
Tianjin Hwatsing
-
Inspection & measurement
37.7
Raintree（1）
0.03 %
Sputter
Source: SEMI & Public information, 2014. **: Estimation
24
Global Semiconductor Equipment
Industry Consolidation Speedup
Mobile Internet brings explosive growth of
computing and communication terminals
Who can make money in the new
business model?
10X
50B connected
devices by 2020
Source: Samsung
# of connected devices
exceeds population
Fewer and Fewer semiconductor manufacturers
can afford the cost of leading edge fab.
Challenges of China semiconductor industry
•
Global industry consolidation creates higher entry-barrier for new comers.
•
China semiconductor industry started late, lack of scale & core competencies.
•
Advanced IC manufacturing requires huge funding.
•
Technology, talent, market, supply-chain all global for Semiconductor industry.
•
Semiconductor industry is no longer a regional industry. What is China’s
positioning?
•
Chinese companies’ capability to go global (technology, marketing, business
practice, decision process, …).
•
Reliance on government initiatives and funding hinders competitiveness.
•
Need to establish solid business model & core competencies, avoid competing
on pricing only.
Opportunities of China semiconductor industry
•
Government resolve and resources to scale up China’s IC manufacturing.
•
Semiconductor industry entering mature phase with narrower margin. Electronic
device manufacturing continue to transfer to Asia from US, Japan and Europe.
•
Semiconductor no longer favored by investors in US. Almost NO US VC funding
to equipment and materials companies in the last 10 years.
•
China’s economy scaled up: capital and talent no longer the “show-stoppers”.
•
Electronic product eco-system established in China: products increasingly being
defined and developed in China (especially in mobile and consumer sectors).
•
Culture, language, eco-systems, of the application market increasingly replace
cost become the new advantages.
•
Abundant engineer & science graduates coming to industry.
•
Cost advantage still exists.
Recent Developments of China’s
Semiconductor Industry
China IC Industry Policies Summary
“Document
No. 18” (2000)
“Science and technology
development program” (2006)
2000.06: Policies on
2006.02: Circular of State Council on Supporting
further encouraging the
Policies of Implementing Outline of Long and
development of
Medium-Term National Scientific and Technological
software and integrated
Development Program (2006-2020). Define 01 project:
circuit (IC) industry.
core devices, high end general chips, and basic software & 02
project: VLSI Equipment & Material Manufacturer and Process
“Document
No. 4” (2011)
“National
Guideline”
(2014 )
2011.02: A Basket
of Measures to
2014.06.24: National
Further Boost the
Guideline for
Software and IC
Development of the
Industry.
IC Industry.
Technology R&D.
2000
2006
Year
2011
2014
• 2014.07.29 Shandong Province issued document “ About implementation of
Document No. 4 to speed up IC industry development”
• 2014.07.31 Gansu Province issued “About Gansu Province’s implementation of
National Framework for Development of the IC Industry”
• 2014.08 Anhui Province issued document “About to speed up IC industry
development”
• 2014.08 Sichuan Province has worked out IC industry development
implementation policies, and set up IC industry investment fund. (From news, not
confirmed.)
• ………
Developing Target of 2014 Guideline
2015
2020
Total Revenue
>350 Billion RMB
>870 Billion RMB (CAGR > 20%)
IC Manufacture
32/28nm mass production
16/14nm mass production
IC Design
Part of key area technologies approach
international first class level
(e.g. mobile smart terminal, network
communication)
Key area technologies achieve international leading
edge. (e.g. mobile smart terminal, network
communication, cloud computing, IOT, big data, etc)
Packaging & Test
Mid- to high-end revenue > 30% revenue
Technology to achieve international leading edge
Material
12 inch silicon wafer into production line.
Enter global supply chain
Equipment
65-45nm key equipment into production line.
Enter global supply chain
Key words:
Scale, Fund, Market, M&A,
Global collaboration, …
Revenue Target of 2014 Guideline (China IC
industry new policy)
China IC Industry Revenue and Projection
$ Billion
Notes:
1. The Revenue number is the sum of China IC companies’
sales, including IC Fabless, Foundry, IDM & OSAT;
2. Revenue Target (2015) : >$57.5 Billion (RMB 350Billion);
3. Y2015~Y2020 CAGR Target: >20%
143
57.5
40.5
2.4
Source: CSIA, SEMI
National IC Fund Structure
China Development
Bank Capital
Shanghai
Guosheng
China
Tobacco
CETC
China Mobile
UNIS
SINO IC Capital
Initiators
Financing
Institution
Increase In
National IC Industry Investment Fund Co.,Ltd
E-TOWN
Capital
Large Scale
Enterprises
Capital and
Share
Social Capital
Responses from International Players
• TSMC: intent to produce 28nm chips in China?
– Dec 2014, TSMC has plans to produce a small volume of mobile chips in China
made on its mature 28-nanometer manufacturing technology. Chairman Morris
Chang said “We are always expanding our capacity and have plans to move a small
part of our expanded capacity to (China)…If we don't go there, Samsung will”.
• UMC: got approval for 12-inch Fab in Xiamen.
– Jan 2015, UMC got approval from Taiwan's Investment Commission to invest in a
12-inch wafer plant in mainland China. UMC will spend US$450 million of its own
funds and more than US$260 million assigned by mainland-based Hejian Technology
(Suzhou). In the future, UMC is expected to invest even more in the mainland plant,
up to about US$1.35 billion.
• GF: Exploring opportunities in China.
• ……
Active M&A in IC Design Segment
• Dec. 2013, Tsinghua Unigroup completed the merger of Spreadtrum
(US$1.7 billion )
• Jul. 2014, Tsinghua Unigroup closed acquisition of RDA(US$907
million)
• Aug. 2014, Montage announced shareholder approval for acquisition
by Shanghai Pudong Science and Technology Investment Co. Ltd. in
a deal valued at about $600 million.
• Aug. 2014, OmniVision received a preliminary acquisition proposal
from a group of investors led by Beijing-based Hua Capital
Management Ltd., worth about $1.64 billion.
• Sep. 2014, Intel invested up to RMB 9 billion (about US$1.5 billion)
for a minority stake of approximately 20 percent of the holding
company under Tsinghua Unigroup, which will own Spreadtrum and
RDA.
M&A and CAPEX Investment in A&T Segment
May 2013, ASE acquired Toshiba’s Wuxi plant （US$11 million ）
Dec. 2013, Texas Instruments acquired UTAC facility in Chengdu.
Jun. 2014, Siliconware started 3rd phase facility in Suzhou, and will add
advanced packaging in Suzhou.
Apr. 2014, Nepes(Korea) signed agreement for wafer package JV in Huai’an
Jiangsu.
Aug. 2014, SMIC and JCET established a Joint Venture in Jiangyin, to setup
12-inch wafer bumping and CP testing production line.
Sep. 2014, Wafer Level CSP Co., Ltd. mergered Gerad Suzhou.
Nov. 2014,
TI announces to open 300mm wafer bumping facility in
Chengdu.
Nov. 2014, JCET is purchasing STATS ChipPAC ($780 million).
37
M&A and CAPEX Investment in A&T Segment
May 2013, ASE acquired Toshiba’s Wuxi plant （US$11 million ）
Dec. 2013, Texas Instruments acquired UTAC facility in Chengdu.
Jun. 2014, Siliconware started 3rd phase facility in Suzhou, and will add
advanced packaging in Suzhou.
Apr. 2014, Nepes(Korea) signed agreement for wafer package JV in Huai’an
Jiangsu.
Aug. 2014, SMIC and JCET established a Joint Venture in Jiangyin, to setup
Semiconductor Eco-system will grow in China
Sep.
Level CSP
Co., Ltd. mergered
Gerad Suzhou.
as2014,
the Wafer
region
becomes
the center
of:
Nov. 2014,
TI announces to open market,
300mm wafer application
bumping facility in
manufacturing,
12-inch wafer bumping and CP testing production line.
Chengdu.
Nov. 2014, JCET is purchasing STATS ChipPAC ($780 million).
38
SEMI China activities
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Networking
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Semiconductor industry gathering,
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technology and investment conferences
reflecting the latest technical trends,
market demand and Capital flows.
March 17-19, 2015,
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• 90% visitors have purchasing authority
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Networking
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•
•
•
•
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•
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SEMI China Advisory Board
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……
Let us help your business in China
2014 SEMI China Member Activities
Time
Program
March
SEMI China Logistics Committee Xi'an Sumsung
Programme Communication Meeting
March
SEMI China PV Standards TC Spring Meeting 2014
March
SEMI China HB-LED Standards TC Petition Meeting
April
April
May
May
SEMI China Logistics Committee meeting with Xi’an
Hi-Tech Industries Development Zone CBZ Custom
officials
SEMI China/ICMTIA Business Mission Japan Tour
SEMI China HB-LED Standards TC Kick-off Meeting
2014
The Sixth Working Meeting of SEMI China Packaging
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June
SEMI China Logistics Committee Summer Meeting
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June
SEMICON West 2014 China Night
Venue
Venue
SEMI China HB-LED Standards TC Autumn Meeting
2014
Harbin
Sept.
SEMICON Europa "Innovation Village" First Show
Grenoble,
France
San Jose
Sept.
2014 Beijing International Microelectronics
Symposium
Beijing
Xi'an
September
“SEMI China Smart Wearable Device Exhibition Area”
Chengdu
on 15th Western China International Fair
Japan
September SEMI China Intelligent Wearable Industry Seminar
SEMI FPD Forum on 15th Western China
October
International Fair
Shanghai
Guiyang
NMC Co. Ltd.,
Beijing
October
Shanghai
October
Baoding, Hebei
October
July
July
SEMI China Intelligent Wearable Devices Seminar
July
July
SEMI China PV Standards TC Autumn Meeting 2014
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Program
July
Shanghai
San Francisco,
USA
Erdos InnerChina OLED Industry Forum and Grassland Gathering
Mongolia
SEMI China IC Summer Camp
Shanghai, China
June
Time
November
SEMI China PV Monocrystalline Committee
The Seventh Working Meeting of SEMI China
Packaging and Testing Committee
SEMI China Touch Screen Committee Preparatory
Meeting
The 29th International Technology Partners
Conference（ITPC）
December
2014 India New Energy Industry Investment
Promotion/Communication Conference
SEMI China PV Standards TC Winter Meeting 2014
Shanghai, China
December
2014 China FPD Winter Industry Gathering
Dalian, China
Xi'an, China
December
China Equipment and Material Committee
December
Chengdu
Chengdu
Shanghai
Suzhou
Shanghai
Hawaii, USA
Shanghai,
China
Changsha
Kunshan
Beijing
SEMI China Equipment and Material
Delegation visit Japan
2014.4
China equipment companies meet ST Micro
2014.10
“China Night” in San Francisco
2014.7
SEMICON China
Supplier Search
Program 2014. 3
SEMI China: Build a “Global Industry
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Thank you!
alu@semi.org