On December 4th, domestic chip stocks opened with a collective strengthening trend. A-shares Dawei Co., Ltd., Wenyi Technology Co., Ltd., Guanghua Technology Co., Ltd., and Huangting International Co., Ltd. all hit the daily limit up, while Chengdu Huawei Microelectronics Co., Ltd., Fuhan Microelectronics Co., Ltd., Guoxin Consumer Technology Co., Ltd., Zhongying Electronics Co., Ltd., Naxin Microelectronics Co., Ltd., and Taiji Co., Ltd. all rose more than 5%; Horizon Robotics on the Hong Kong stock market rose nearly 6%, while SMIC and Huahong Semiconductor rose over 3%.
The day before, the four major domestic industry associations represented by the China Association of Automobile Manufacturers issued statements one after another, suggesting that relevant domestic enterprises should be cautious in purchasing American chips. The China Association of Automobile Manufacturers (CAAM) firmly opposes the US government's generalization of national security concepts and abuse of export control measures. The arbitrary modification of regulatory rules by the US government has seriously affected the stable supply of American chip products. The trust and confidence of the Chinese automotive industry in purchasing chip products from American companies are being shaken, and American automotive chip products are no longer reliable or safe.
On December 2nd, the US Department of Commerce announced new export control regulations under the pretext of safeguarding national security, including 140 Chinese companies on the entity list and more semiconductor products such as semiconductor equipment and high bandwidth storage chips under export control.
According to a research report released by CITIC Securities, the four major industry associations are calling for a wind direction leading role, and other industries are expected to follow suit in the future. The overall localization pace of the domestic semiconductor industry is expected to further accelerate. Among them, the automotive industry is expected to usher in the second round of chip localization acceleration stage, and low localization sub tracks such as computing and simulation are expected to develop in succession.
Vehicle grade chips are the core "brain" of intelligent electric vehicles, and are still in high demand with relatively low localization rates. Unlike traditional fuel powered vehicles that require around 600 to 700 automotive chips per vehicle, the demand for chips in electric vehicles has skyrocketed to 1600 chips per vehicle, and the demand for smart electric vehicle chips is expected to further double.
According to data quoted by CITIC Securities, in 2023, Chinese Mainland will account for about 30% of the global semiconductor market demand, while the output value will account for about 7% of the global semiconductor market, and the corresponding self-sufficiency rate will be about 23%, of which only 12% are Chinese local enterprises, and 11% are foreign enterprises manufacturing in Chinese Mainland.
American manufacturers still hold a relatively high share in the sub segments of computing, simulation, and storage. Taking the intelligent cockpit and intelligent driving SoC computing chips that are clearly perceived by domestic consumers as an example, the Qualcomm 8155 and 8295 cockpit chips account for 80% of the high-end cockpit chip market; The Nvidia OrinX chip has almost become an indispensable key hardware for mid to high end car models.
Interface News learned that for high-performance SoC chips, automotive companies will plan their own selling points and choose advanced products that are as leading as possible within their budget range, in order to promote intelligent selling points to the market. Due to the high difficulty of developing such chips, long research and development cycles, and the need for longer security verification cycles to be trusted by automotive companies, there are not many entrants in the domestic industry, and most of them are concentrated in the mid to low end market.
However, with the intensification of intelligent competition, the advantages of domestic chip companies that can cooperate with automotive companies to achieve deep joint development in software toolboxes, development platforms, and even application software research and development are gradually emerging.
According to data released by the Gaogong Intelligent Automotive Research Institute, Xinchi Technology is the only domestic chip company to rank among the top 10 in terms of passenger car cockpit chip delivery volume in the first half of this year.
Chen Shujie, Vice President of Xinchi Technology, stated in an interview with Interface News that Xinchi Technology has seized the historical opportunity of the development of automobiles from traditional distributed electronic and electrical architecture to centralized architecture. When traditional chip manufacturers did not have corresponding products, Xinchi Technology took the lead in launching new products that meet the demand for intelligence to the market. Moreover, domestic chip companies such as Xinchi can cooperate more efficiently to improve the R&D efficiency of vehicle manufacturers and reduce R&D costs.
Smart driving chip manufacturers represented by Horizon Robotics are developing towards the high-end market. This year, Horizon Robotics released the Journey 6 chip with a computing power of up to 560 TOPS, which has been designated by multiple domestic and foreign automotive companies such as BYD, Ideal Auto, SAIC Group, and Volkswagen.
Wei Xiaoli, which has contributed nearly 90% of the pre installed market share of Nvidia ORIN chips in the Chinese market, is seizing the opportunity to launch its self-developed chips. In July of this year, NIO announced the successful chip fabrication of its self-developed intelligent driving chip, the Shenji NX9031; Xiaopeng Motors released the world's first end-to-end customized chip that can be applied to robots, AI cars, and flying cars simultaneously this year; Ideal Auto's self-developed intelligent driving chip is rumored to be completed by the end of this year.
These self-developed chips still have a certain distance to go before achieving large-scale production. The reference data is that the first SoC chip from Xinchi Technology took about two to three years from chip fabrication to large-scale shipment.
The breakthrough in domestication rate of automotive grade power chips and control chips, which have relatively low R&D barriers and are widely used, is more evident. According to data provided by Rorabeg to Interface News, the market share of domestically produced IGBT was about 20% in 2021, and it will rapidly increase by more than half in 2023. Semiconductor products represented by IGBT power devices are expected to achieve over 30% domestic substitution by 2025 and over 50% by 2027-2028.
A IGBT R&D personnel told Interface News that the rapid development of intelligent electric vehicles and the "chip shortage crisis" have caused traditional overseas chip manufacturers to fail to keep up with the demand of Chinese car manufacturers in a timely manner, and the blank market they have given up has been seized by domestic power chip manufacturers. With their low prices and fast response times, these rising stars entered the conservative automotive supply chain system at a faster pace than expected.
Roland Berger's global partner, Shi Shuai, stated in an interview with Interface News that "in the current era of increasingly fierce price competition in new energy vehicles, car companies have a strong demand for cost reduction. The use of more cost-effective domestic IGBT solutions in mid to low end models with relatively balanced technical requirements has also become the first choice
Although the development and rise trend of China's chip supply chain and industry is gradually emerging, there is still a high dependence on the global supply chain in key links of the industry chain, and there are still many challenges and bottlenecks that need to be continuously addressed.
It is reported that in the design process, the three major players of EDA design software in the United States account for 70% of the market share; The top five Japanese and South Korean and Taiwan, China enterprises of raw materials represented by silicon chips accounted for 85% of the market share; ASML, Nikon, and Canon, the core equipment represented by lithography machines, hold a leading position of 98%.
Shi Shuai told Interface News that the next key step for the domestic chip industry is to improve the localization rate of the core links in the industry chain, solve the "bottleneck" problem, and ensure stable industry chain performance in the future dynamic international context.