Chinese semiconductor industry

Shenzhen semiconductor policies. Big plans to become an Chip Design, Advance Packaging, EDA hub.

Shenzhen's new policy for semiconductor and integrated circuit industry is coming soon

This "Draft for Comments" focuses on supporting high-end general-purpose chips, special-purpose chips, core chips, compound semiconductor chips and other chip designs; silicon-based integrated circuit manufacturing; gallium nitride, silicon carbide and other compound semiconductor manufacturing; high-end electronic components manufacturing; Advanced packaging and testing technologies such as round-level packaging, 3D packaging, and Chiplet; development and application of EDA tools and key IP core technologies; production of advanced equipment and key components such as lithography, etching, ion implantation, deposition, and testing equipment ; and the R&D and industrialization of core semiconductor materials.

This "Draft for Comments" clearly proposes to comprehensively improve the core links of the industrial chain, accelerate the breakthrough of basic supporting links, concentrate efforts to enhance the momentum of industrial development, build a high-quality talent guarantee system , and create high-level characteristic industrial parks .

The following is part of the ED :

1. Comprehensively improve the core links of the industrial chain
(1) Achieve breakthroughs in core chip products. Focus on making breakthroughs in the design of high-end general-purpose chips such as CPU, GPU, DSP, and FPGA, and lay out the development of special-purpose chips such as artificial intelligence chips and edge computing chips.
(2) Strengthen the support for the tape-out of design enterprises. Actively coordinate the opening of a certain capacity of integrated circuit production lines and pilot lines supported by Shenzhen to serve the needs of small and medium-sized design enterprises in Shenzhen.
(3) Improve semiconductor manufacturing capacity. Strengthen cooperation with integrated circuit manufacturing enterprises, plan and build integrated circuit production lines of logic technology and characteristic technology, and support the construction of high-end chip capacitors, inductors, resistors and other electronic components production lines.
(4) Catch up with the level of high-end packaging and testing. Accelerate the R&D and industrialization of power devices such as MOSFET modules and high-density memory packaging technologies, focusing on breakthroughs in wafer-level, system-level, bump, flip-chip, through-silicon via, panel-level fan-out, 3D, vacuum, Chiplet Advanced packaging core technologies such as chip ) , as well as advanced wafer-level testing technologies such as pulse sequence testing and IC integrated probe cards, will be subsidized according to 10% of the actual investment of the project, and a single project will not exceed 10 million yuan.
(5) Accelerate the maturity of compound semiconductors. Encourage enterprises in the fields of communication equipment, new energy vehicles, power systems, rail transit, and intelligent terminals to promote and try compound semiconductor products to enhance the competitiveness of systems and complete machine products.

2. Accelerate the breakthrough of basic support links

(6) Accelerate EDA core technology research. Promote the localization of the entire process of EDA tool software such as analog, digital, and radio frequency integrated circuits . Support the research and development of EDA technologies such as advanced processes, new generation intelligence, and ultra-low power consumption. Increase the promotion and application of domestic EDA tools, encourage enterprises and scientific research institutions to purchase or rent domestic EDA tool software, and promote domestic EDA tools to enter university curriculum teaching.
(7) Promote the independent control of key materials. Relying on key enterprises to speed up photomasks, photoresists, polyimides, sputtering targets, high-purity chemical reagents, electronic gases, etching solutions, cleaning agents, polishing solutions, functional additives for electroplating solutions, fluorinated coolants, ceramics.
(8) Breakthrough in supporting core equipment and spare parts. Encourage our city's enterprises to carry out research and development of key integrated circuit equipment and components, promote the integration of high-end equipment components and systems such as testing equipment, thin film deposition equipment, etching equipment, cleaning equipment, high vacuum pumps, etc. to carry out continuous research and development and technical research.
(9) Increase support for key and core technology research. Further enhance the core competitiveness of Shenzhen's integrated circuit industry, enhance the overall independent innovation capability of the industry, break the situation that major key core technologies are controlled by others.

3. Cohesion to enhance the kinetic energy of industrial development

(10) Actively undertake national special strategic tasks. Encourage relevant units to undertake major projects in the integrated circuit field, major technical research plans and key research and development plans carried out by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and other ministries and commissions.
(11) Support enterprises to become bigger and stronger. Help the rapid development of enterprises, increase market share, and continue to expand the scale of the industry. For Shenzhen integrated circuit EDA, IP and design enterprises.
(12) Strengthen the construction of industrial support platforms. Build public service platforms such as manufacturing innovation centers, industrial innovation centers, IC design platforms, equipment and materials R&D centers, testing and certification centers in the integrated circuit field, relying on backbone enterprises and scientific research institutions, and unite upstream and downstream enterprises, universities, research institutes, etc.
(13) Improve the industrial investment and financing environment. Explore the establishment of municipal-level integrated circuit industry investment funds, focusing on supporting the development of the integrated circuit industry.
(14) Promote the rapid growth of import and export trade. Build an information exchange and supervision platform covering the whole process of customs clearance, optimize and simplify the import and export links and procedures of integrated circuit products, and establish a "white list" of pilot units such as integrated circuit enterprises and scientific research institutions in this city to facilitate the customs clearance of pilot units.
(15) Support industry organizations to play a bridge role. Establish a semiconductor and integrated circuit industry alliance that unites the upstream and downstream of the industrial chain, continuously gather and integrate global industrial resources and strengths, and enhance the overall competitiveness of Shenzhen's semiconductor and integrated circuits. 4. Build a high-quality talent guarantee system
(16) Strengthen talent incentives and guarantees. Give full play to the role of market regulation, highlight the use-oriented, market recognition, and market evaluation, take the market value and economic contribution of talents as the main evaluation criteria, establish a market-oriented incentive mechanism linked to the market value and economic contribution of talents, and focus on supporting the introduction and retention of talents.
(17) Implement the IC global talent retrospective plan. Accelerate the targeted introduction of global high-end talents, innovation teams and management teams from key countries (regions
(18) Industry-university linkage to cultivate professionals at all levels. Vigorously give full play to the role of enterprises in talent training, accelerate the integration of production and education, and encourage qualified colleges and universities (including technician colleges) to cooperate with integrated circuit companies to build high-skilled talent training bases . , a one-time subsidy of no more than 20% of the base construction investment , up to 20 million yuan.
5. Create a high-level characteristic industrial park
(19) Optimizing the supply of industrial space. Coordinated by the municipal industry department, the key areas of the semiconductor and integrated circuit industry cluster are responsible for quantifying the annual industrial land and industrial housing indicators to ensure that the city's semiconductor and integrated circuit industry adds or upgrades 200,000 square meters of industrial land or 500,000 square meters each year.
(20) Increase support for the construction of characteristic parks. For the identified characteristic industrial parks that are newly built or whose existing industrial space has been renovated, green channels will be opened in the process of project establishment, registration, and examination and approval .
(21) Strengthen supporting measures for environmental protection. For the characteristic parks to be built, the municipal and district environmental protection departments will form a special working class to provide professional guidance services on environmental protection one-on-one.

tphuang said:

It's possible that the type of wafers that SMIB is producing right now was in demand in H1, so they can fetch higher prices.

A couple of more things. I think it's the American companies themselves that are probably most aware of their Chinese competitors. And you can see how desperate they are to get around these sanctions. For example, here is an Caixin article where Nvidia founder basically says they are going to try to sell a version of H100 that will be sanction proof. I find that a rather dubious claim and also don't think Chinese data centers will have trust toward this. They should steam ahead with transitioning to domestic players. Nvidia really does not want any competition for its products You can be that this applies to Qualcomm, Intel and AMAT also.

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Just browsing through Biren website and they listed this article on how AI helps with medical imaging. The important part here is that AI has implications across many industries in developing new technology. That's why people like Eric Schmidt is so obsessed about this.

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I think Chinese gov't can probably label all American semiconductor imports as unreliable and recommend Chinese companies to avoid them when possible. That kind of order will affect companies like TI and Analog Devices. But in reality, what will kill them is probably all the mature node capacity that is coming online in China in the next 3 to 4 years

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I find that assertion of a sanctions proof H100 from Nvidia interesting because if true, that means they are taking seriously the idea of de-americanizing their operations or at the very least, having a parallel operation that can avoid US toxicity. This is the order of effects and unintended consequences that will now occur as a result of these abrupt changes w/o industry consultation. But this goes beyond Nvidia, their operations do not span the whole product cycle since they are a design house so they are reliant on partners to provide the tools and product the goods. So in effect, Nvidia will now be working the US free requirements down to its partners in the rest of the product cycle like tool vendors, foundries like TSMC and asking them to implement, and those partners will work down through their vendors, etc until they reach the end of the supply chain. This is going to create huge opportunities for Chinese and other OUS entities and force US companies to reduce their US exposure in order to meet the needs of requirements. If you multiply this by other US/Multinationals driving the same requirements and the impact will be huge.

Regardless of whether Chinese buyers will still bite, the fact is if the semiconductor market comes around to the idea that minimizing US exposure is key to commercial success, then no amount of subsidies or legislation the US government throws at them will result in a thriving leading edge industry in the US. It is quiet ironic that President Trump, a man derided by many for his abilities understood better than many of this supposedly better educated peers. Even broken clocks can be right sometimes.

NVIDIA will likely just nerf the H100 so it meets the US government regulation and try to sell that.
But whatever they do their product will be stuck in time since they now have an upper ceiling on performance of the product they can sell in China.

tokenanalyst said:

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Is this new capability? I.e. a sanction substitute?

Pkp88 said:

Is this new capability? I.e. a sanction substitute?

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One is Bid for a set of deposition tools won by Naura.
The other is that Wanye is the securing and upgrading their manufacturing capabilities so they can deliver semiconductor manufacturing equipment faster.

Minm said:

AMEC stock down today 19.4%, NAURA 10%, SMIC 4%, Kingsemi down 16.9%, GigaDevice down 8.8% etc. Is it time to buy? Shouldn't Chinese semiconductor equipment makers become more valuable now that they'll have the whole market to themselves?

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I know its tempting but keep in mind the overhang of the inevitable market crash coming this winter. The macro environment is affecting everything now with so many simultaneous external risks. I'm expecting somewhere between a 30-55% further drop between now and that time. If you are afraid of missing out, I would do piecemeal accumulation but that's about it. In my case, I'm expecting a global market crash sometime during the winter. Don't expect too much strength from obvious winners like Chinese semicon companies that benefit from American tech sanctions. The Chinese stock market environment is all about momentum trading. Once the global crash accelerates, no stock will be safe no matter how profitable or secure their future is. It won't matter because everybody will be heading for the hills and selling. There are going to be exceptions like SMIC, Huahong that will drop far less but they will still drop. The important thing is, you need to have money to buy at that time because that's when you'll make the most money, not during dips here and there like this latest dip.

gelgoog said:

NVIDIA will likely just nerf the H100 so it meets the US government regulation and try to sell that.
But whatever they do their product will be stuck in time since they now have an upper ceiling on performance of the product they can sell in China.

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I agree they will just limit H100 speed, but the point here is that AI training / inference is not like lithography: EUV is an enabler to manufacture chips beyond a certain node, instead a faster GPU is just that, a faster GPU.

NVIDIA V100 is about 3 times slower than the freshly banned A100.


But this does not yield to any hard limit on what you can or can't do in AI. Training will be just 3 times slower, that's it....or maybe you end up buying more V100 to still get similar result.

AI is mainly software and cannot be blocked (also because all main AI frameworks are open source), I agree it can be convenient to have a faster GPU, but is not an enabler by itself.

A much more serious impact will have the banning of foundry services for firms like Biren or Horizon Robotics.

But it is worth noting, that nowadays US must rely on foreign countries to be effective, in this case on Taiwan's TSMC halting foundry services for advanced nodes. US alone is already impotent against China. But to rely on foreign countries, essentially it means to arm-twist and coerce developed world's nations. The impact of persistent intimidation and bullying is difficult to foresee, we all have been teached since childhood that it will be negative in the long term.

Here I see an opportunity for SMIC N+2 7nm and the Chinese expansion of localized 28nm line, as the US restrict TSMC to service their Chinese mainland client.

TSMC is expected to see its fab capacity utilization trending downward in the next six months, except for 5nm and 28nm process nodes, as order cuts by fabless clients are beginning to take a toll on the foundry, according to industry sources.





1 hour ago — TSMC is expected to see its fab capacity utilization trending downward in the next six months, except for 5nm and 28nm process nodes, as order ...