The general trend of integration of integrated circuit industry chain is merger and reorganization
First, integrated circuit has become a mature industry, industry concentration is getting higher and higher
As a strategic, basic and leading industry for national economic and social development, the integrated circuit industry has a strong innovation and integration ability, and has penetrated into all aspects of people's life, production and national defense security. In the wake of the international financial crisis, countries around the world are trying to explore the path of economic transformation, accelerate the cultivation and development of strategic emerging industries, and strive to win the upper hand in the global economic development and competition in the post-crisis era. Has a strong integrated circuit technology and industry, has become an important symbol of an innovative country. According to the Global Semiconductor Trade Statistics (WSTS), the size of the global semiconductor market reached $333.1 billion in 2014, up 9% year on year and the fastest growth rate in nearly four years. According to ICInsight's statistics of global GDP and the average annual growth rate of the IC industry, it can be clearly seen that the IC industry is growing slowly and approaching GDP, indicating that the global IC industry has become a mature industry. Moreover, the industry features that emphasize cost synergy and scale economy also indicate that this industry has become a mature industry.
In the next few years, the global integrated circuit industry will enter a period of major adjustment and reform. With the rapid increase of investment scale, the market share will accelerate to the concentration of dominant enterprises, and in many fields, two or three enterprises will form a monopoly situation. In addition, international enterprises through the construction of cooperation alliances, mergers and reorganization, patent layout and other ways to strengthen the control of core links, market entry barriers further increased. Global integrated circuit industry is still "big Evergrande"; The difficulty of industrial technological innovation increases, the speed begins to slow down, and the technological competition becomes more and more intense. The rapidly growing Chinese market drives the development of the global industry, and the "China effect" leads the IC industry. Under the pressure of market competition, the business model has changed quietly -- many IDM factories have turned to the "light fabs" mode or foundry mode, and have entered the global foundry. The global integrated circuit industry shows a trend of transferring from developed regions to developing countries and regions. With the increasing concentration of the industry, the development of the industry has gradually ended the development situation of high growth and cyclical fluctuations in the past, and started to step into the stage of stable development. The pace of industrial structure adjustment has accelerated, and the IC design industry and the foundry wafer industry have emerged as a new force. The industrial center of gravity is shifting further to Asia, especially to mainland China. Mainland China will become the main growth point of the global semiconductor market, and the rapid improvement of the global status of China's integrated circuit industry and the increasingly mature industrial chain provide a good opportunity for the development of China's integrated circuit industry.
II. The integrated circuit market is highly international, and the whole industry chain is highly competitive
Since the break of Wintel system, the global IC industry has begun to re-divide the power pattern. The major multinational enterprises are active in it, with the main purpose of strengthening the integration of industrial chain and control ability, and launching fierce competition and cooperation game among each other. This fully shows that the core competitiveness of enterprises no longer comes from a single superior technology or product, but more from the highly concentrated and efficient flow of resource control and operation power in the highly integrated industrial chain, the industrial competition mode has been officially transformed to the "competition of the whole industrial chain".
In 2014, the "competition of the whole industrial chain" of integrated circuits became more and more intense with the further adjustment of the global industrial pattern. The "arms race" of international chip giants became more and more intense, and China's chip manufacturing industry faced increasing international pressure. Due to the lack of core intellectual property rights, 4G devices will still face patent risks in the accelerated replacement process. The lack of interaction among China's chip manufacturers, terminal manufacturers and software manufacturers and the lack of close collaboration between the upstream and downstream of the industrial chain have always been inherent problems, but it is particularly prominent at this time. It is urgent to accelerate the improvement of the ecological environment of the integrated circuit industry and promote the formation of a large industrial chain of "chip-whole-system".
The Chinese IC market is highly internationalized. On the one hand, its huge demand is mainly met by imports. The value proportion of integrated circuits in China's total imports also increased from 5.9% in 2000 to 11.1% in 2014, which made integrated circuits surpass crude oil as China's largest import commodity for several consecutive years. In 2013, the import value of integrated circuits reached 231.3 billion US dollars, while the import value of crude oil was 219.6 billion US dollars. On the other hand, most of the world's top 20 semiconductor manufacturers, including Intel, Samsung, Hynix, Micron and TI, have invested a lot of money to build production bases and research and development centers in China.
III. China has become the main market for semiconductors in the world, but its industrial development is relatively lagging behind
From 2000 to 2014, the global semiconductor market grew from 204.394 billion US dollars to 333.151 billion US dollars. The average annual growth rate is just 3.6%. Meanwhile, the semiconductor market in the Asia-Pacific region (excluding Japan) grew at an average annual rate of 10%, rapidly expanding from US $51.265 billion in 2000 to US $194.226 billion in 2014. Correspondingly, the proportion of the Asia-Pacific region with China as the core in the global semiconductor market has increased rapidly, with its market share also rising sharply from 25.1% in 2000 to 58.3% in 2014. With the rapid growth of the domestic integrated circuit market, its global position is also rising rapidly. In 2014, the scale of the domestic IC market in the Asia-Pacific semiconductor market accounted for 87% of the proportion, the proportion of the global semiconductor market also reached 50.7%. China has become the main market for semiconductors in the world.
China has become a major source of revenue for the world's major semiconductor companies. By analyzing the 2014 annual reports of the world's top 20 semiconductor companies, it can be found that the average proportion of their sales in the Chinese market has reached 47.8% in their global total sales. This explains why the international semiconductor industry, and governments concerned, have shown great concern about China's efforts to support its IC industry -- all for huge commercial interests.
The main reason is that from the mid-1980s to the end of the 1990s, foreign countries imposed blockades and restrictions on the new technology of China's integrated circuit industry in terms of equipment, materials and processes. Secondly, although the government attaches great importance to this industry and has issued a number of supportive policy documents, it lacks the corresponding investment intensity, investment mode and evaluation mechanism, and has insufficient understanding of its industrial characteristics of "high investment, high return and high risk". Moreover, the domestic industry chain development pattern that the application is the traction, that is, the system drives the whole machine and the whole machine drives the components has not been formed.
Internal factors - industry development relative lag Main reason due to the integrated circuit enterprises financing bottleneck, industry leading enterprise self hematopoietic function is poor, innovation elements accumulation is insufficient, business owners, serious "zito PND tail-on" concept, enterprise more weak and lack of talent technology, insufficient domestic demand to play the market, industry chain is not matching and coordination pattern has not been formed.
To sum up, the development of China's integrated circuit industry lags behind seriously, the integrated circuit industry is very weak, far from supporting the national economic and social development and national information security construction. No matter in design, chip, or packaging and testing, the technology level of China's IC industry lags far behind foreign countries. In 2014, the import quantity of China's integrated circuits was still as high as 285.66 billion pieces, an increase of 7.3% compared with 2013. Although the import amount declined slightly, it was still as high as 217.6 billion dollars. For many years, together with oil, it ranked among the two largest imported commodities.
At present, the current situation of the global IC industry is "international capacity saturation, domestic capacity lack", so there is a huge space for the expansion of the domestic IC industry, which needs to be planned and laid out in an international perspective. What is worth paying attention to is that the investment scale of China's integrated circuit industry has been insufficient for many years. From 2008 to 2014, the total investment in fixed assets of China's integrated circuit industry was only about 50 billion US dollars, and the total investment of the whole industry was only about 7 billion US dollars per year on average. In 2013, Intel's R&D investment was as high as 10.611 billion US dollars. It fully shows that the gap between domestic enterprises and international enterprises is further widening.
The industry is benefiting from having the world's largest and fastest-growing integrated circuit market. With the transformation of China's economic development mode, the accelerated adjustment of industrial structure, as well as the interaction and deep integration of industrialization and information technology, and vigorously promoting information consumption, the demand for integrated circuits will grow substantially, and the market size is expected to reach 1.2 trillion yuan by 2015. Therefore, how to make good use of the market advantage in the future development of China's semiconductor industry is very critical. How to break through the innovation of integrated circuit industry and improve the ability of industrial innovation has become the top priority of current industrial development.
IV. Global integrated circuit industry chain integration has become a trend
On the one hand, there are fewer and fewer new entrants to the global IC industry. One reason is that the barriers to entry, such as technology and capital, are getting higher. Another reason is that the risks are not proportional to the benefits, making the industry less attractive. So China, from the strategic perspective of supporting economic and social development and safeguarding national security, may be the last of the newcomers. Global IC industry Intel, samsung and TSMC situation of the three pillars of the basic form, from the aspects of integrated circuit application level, at present basically see qualcomm, apple and other big customer's order, and the integrated circuit industry technology progress mainly look at Intel, samsung and TSMC three, so "concurrently Evergrande" become inevitable trend.
On the other hand, the number of semiconductor companies will be further reduced. In recent years, mergers and acquisitions in the integrated circuit industry are active. The key reason is that the industry is becoming more and more mature. Only by getting together can the cost be reduced, and only by exerting the effect of scale economy can the semiconductor companies survive. Chip giant Intel is reportedly paying $16.7 billion in cash to acquire AlTR, the industry leader in field programmable gate array (FPGA) specialty chips. Intel hopes to use this to expand its data center server product lineup. Broadcom announced it has agreed to a $37 billion stock and cash deal to acquire San Jose, Calif.-based chip company AVGO (AVGO). Microchip bought Merry, NXP bought Freescale, overseas semiconductor manufacturers are setting off a wave of mergers and acquisitions, and so on. For the integrated circuit industry, mergers and acquisitions are not new, but the speed and scale of this year are indeed much greater than in the past. So far this year, semiconductor deals have totaled $63.4 billion, up from about $31.9 billion in 2014, or about half that.
In fact, not only overseas mergers and acquisitions busy, the domestic semiconductor industry is also international and domestic mergers and acquisitions frequency. In 2014, JFST acquired Zhiruida for 340 million yuan; Changdian Technology for $780m to acquire all of StarTech's businesses except Taiwan; Huatian Technology's acquisition of Flipchip International of the United States for less than $42 million; In 2015, SMIC planned to acquire East Korea Hi-Tech; Wu Yuefeng led a Chinese consortium to launch the acquisition of ISSI. A few days ago, the media came out of the news, Datang communication is in talks to buy the United States communication chip company Marvell. Prior to that, Tsinghua Unigroup acquired Spreadtrum Communications for about $1.7 billion, or about 10.3 billion yuan; Unigroup's acquisition of Reidiko for a total value of approximately $907 million; And so on.
The integrated circuit industry is a mature industry for the world. The design cycle is long and the research and development cost is high. It costs at least several billion dollars to build a wafer fab and several million dollars to design a chip... Therefore, in this mature industry, the emphasis on cost synergy and scale economy has become the main purpose of merger and acquisition. It is certain that the number of semiconductor companies will decline further in the coming years.
Fifth, merger and reorganization may be the best entry point and choice for the latecomers
At present, the global IC industry has entered the era of oligopoly competition, and mergers and reorganizations of IC enterprises at home and abroad are surging. In some parts of the semiconductor industry, mergers and acquisitions are a win-win for investors and companies. For example, the memory field has been reduced to three core enterprises, and the profit margin has been improved to a certain extent, which is a concentrated reflection of scale effect and manufacturing capacity. Due to the late start of domestic integrated circuit enterprises, they have repeatedly encountered the "patent suppression" from international giants in their development. So for a international has been very mature industry, and the gap between the domestic IC industry is so large, enterprise to do bigger and stronger kept pace, by private research and development is no matter how behind the step of international industry development, mergers and reorganization may be integrated circuit as far as possible, shorten the development time, rapidly growing enterprise, Become the best way and choice for the latecomer.
On the one hand, the advantage of integrated circuit enterprises of foreign mergers and acquisitions is that one is the advanced technology can be got through mergers and reorganization, patent or other intellectual property rights, including technical personnel, obtain in advance for we have the potential of technology or product, reduce the development cost shorten the development cycle, improve the independent innovation and comprehensive ability to catch up with the international advanced level; Secondly, through merger and reorganization, enterprises can improve their operating scale and industry status, expand production capacity and bring into play the benefits of scale; Thirdly, through merger and reorganization, the market share of the company's products can be expanded, especially through the acquisition of well-known foreign brands, which can form the brand sales scale of the company's products and seek to maximize profits.
Of course, no matter when the most advanced technology can not be bought with money, only through the merger and reorganization of the industry in the digestion and absorption of re-innovation, integrated innovation and original innovation among the overall arrangement, and adhere to the innovation strategy from beginning to end, it is possible to fully catch up and eventually surpass.
For example, as the leading sealing and testing company in China and the sixth largest sealing and testing company in the world, Changdian Technology will acquire Xingke Jinpeng, the fourth largest sealing and testing company in the world, which will impact the top three in the world in terms of revenue scale and technology level, and establish the position of the international sealing and testing giant. The subsequent integration of the two companies will also have significant synergies, one is the formation of the leading pattern of domestic testing, and the acquisition of the introduction of the National Semiconductor Fund and SMIC is expected to become the future shareholders of Changdian, the future national policy and industrial chain support will further inclines to Changdian; The second is that Changdian will fully obtain the technical advantages of star Ke Jinpeng, star Ke Jinpeng will obtain the domestic labor cost advantages; Third, the customer overlap degree of Changdian and Xingke Jinpeng is low, the customer complementary advantage is obvious; Fourthly, the two companies will obtain significant scale effect in terms of capacity and management after the merger. This is also the first time since the establishment of the national industry fund to participate in domestic integrated circuit enterprises to overseas companies mergers and acquisitions events.
On the other hand, the input of integrated circuits has a threshold value, and it is difficult to have obvious effects unless it reaches a certain scale. Therefore, increasing integration efforts and concentrating effective resources can greatly enhance the competitiveness of enterprises. Integrated circuit manufacturing needs to reach a certain volume in order to achieve profitability. Today, the construction cost brought by chip technology innovation makes the enterprise unbearable, the construction of a production line of 50,000 pieces of 12-inch integrated circuit needs about $5 billion, a huge amount of capital investment for the upgrading of the industry challenges. According to the development status of China's integrated circuit industry, it is necessary to actively advocate and implement the merger and reorganization of enterprises, which can solve the problems of China's integrated circuit industry such as unreasonable structure, low concentration, scattered and weak enterprises, and homogeneous competition. It will be funded through mergers and reorganizations