And “China Chip” began to break through, producing more than 190 billion chips, and at the same time reduced the import of 54.5 billion chips year-on-year in the first 8 months. Generally speaking, what is the potential for Chinese chips to “breakthrough”? Can the chips of American companies still sell?
China’s chip import and export demand relationship is changing
China is a well-deserved big chip consumer. Under the background of vigorously developing industries such as automobiles, the Internet of Things, and artificial intelligence, the demand for chips is growing day by day. In addition, in the field of consumer electronics products, it is also necessary to purchase a large number of chips to meet the needs of smartphones and computer CPUs.
However, there are different types of chips and different manufacturing processes. According to different market demands, the value of chips is changing at any time. For example, mobile phone chips have been in short supply for the past two years, and Qualcomm’s chip delivery period has been extended to more than 6 months.
The same is true for graphics cards. During the hottest period in the market, one card was hard to find, and top-level graphics cards were sought after in the game and cryptocurrency markets. Some people even hoard products and become middlemen.
But now? In the first half of this year, consumer demand for smartphones declined, and Qualcomm’s chip shipments plummeted. It had to switch to the server chip market to reduce its dependence on the smartphone chip business. And Nvidia has also admitted that it has produced too many graphics cards and is selling them at below-market prices.
After the decline in demand, the country naturally reduced chip imports. The data shows that the number of domestic chip imports from January to August this year was 369.53 billion, a decrease of 54.5 billion chip imports from 426 billion in the same period last year. In terms of China’s independent chip production capacity, 190 billion chips have been produced domestically, of which 160 billion chips are for export.
Combining the performance of the chip market and the status of chip import and export, China’s chip import and export demand relationship is changing.
Originally, most of the needs were met by imported chips, but now the chips that can be produced by themselves are placed in localized manufacturing. For example, mature process chip products such as automotive chips, Internet of Things chips, and power chips do not necessarily need to rely on imports. As for smartphones and computer CPU chips, there are not many sales due to the decline in demand.
Breakthrough in Chinese-made chips
Not all chip demand is down, just some chips are being shifted to domestic production. SMIC has four new 12-inch factory projects in its hands, and it is expected that more domestic chips will be localized in the future. The domestic chip also showed a “breakout” trend.
The chip industry is roughly divided into three major sectors: design, manufacturing, and packaging, and Chinese manufacturers have participated in the layout of these sectors.
For example, in the field of design, domestic manufacturers are gradually adopting the open source and free RISC-V architecture, and developing domestic chips based on this architecture does not need to consider the problem of obstruction. Because RISC-V is not only free and open source, but most of the senior members of RISC-V are Chinese companies.
Alibaba has released the world’s first high-performance development platform Wujian 600 based on the RISC-V architecture, helping domestic manufacturers to better develop RISC-V chip products and expanding the RISC-V industry ecosystem.
In addition, domestic first-line mobile phone manufacturers such as Xiaomi and Vivo have entered the camp of self-developed chips, bringing their own chip products. The LoongArch instruction set self-developed by Loongson Technology is also supporting domestic chip design toward autonomy.
The EDA software provided by Huada Jiutian supports mature chip design and brings systematic chip design support for the whole process.
Chip design is the source of the industry, and only with design can there be manufacturing. In the field of manufacturing, domestic etching machines have developed to the level of 5nm, and SMIC has mastered the mass production of 14nm chips. There are also ion implanters, cleaning machines, etc., which are advancing one after another, providing industrial chain assistance for the mature 28nm process.
If the core technology of the chip design and manufacturing industry is solved, basically the packaging sector can also get a consistent release pace. The 2.5D/3D packaging lithography machine delivered by Shanghai Microelectronics is used in the advanced packaging industry.
Will sales of U.S. chip companies decline?
Chinese chips are forming a new demand market. Under the “breakthrough” of major domestic manufacturers participating in chip design, manufacturing, and other industries, Will sales of U.S. chip companies decline?
In fact, the answer is very clear. The United States has been preventing American companies from shipping high-end chip products. Nvidia’s A100 and H100 high-end GPUs are restricted. The two semiconductor equipment giants, KLA and Lam Research, cannot ship 14nm chip manufacturing equipment at will.
Therefore, I am afraid that the chips of American companies will not be able to sell. They must either turn the US market into a big chip consumer or clear the chip inventory at a low price. Other than that, just go with the flow.
In order to protect the development of its own chip industry chain, the United States has used unconventional means to hinder competitors. As a result, the consumer market has begun to become self-sufficient. China’s chip production capacity has increased, and the decline in chip imports is the best performance.
