As the leading chip manufacturing enterprises in the two major economies, Semiconductor Manufacturing International Corporation and Intel Corp can be seen as the epitome of the scale and level of chip manufacturing in these two markets, both in the past and in the future.

The worse the economic situation is, the more emphasis should be placed on investment and the development of basic manufacturing industries, which seems to be the consensus of all major markets in the world. This situation can be traced back to the 1930s of the last century, when a rare economic crisis broke out in the United States, when President Roosevelt took measures to increase investment in infrastructure and manufacturing, thus driving the market and the national economy out of the doldrums gradually. After the subprime mortgage crisis broke out in the United States in 2008, it affected many countries, including China, which also invested a huge amount of money in infrastructure construction and boosted domestic consumption.

The same thing seems to be happening in the semiconductor industry, where 2018 and 2019 were the lowest years for the global semiconductor industry. Since the launch of the "big fund" in 2014, China has put semiconductor manufacturing at the core of the development of the industry, and investment has mainly flowed to semiconductor manufacturing. With the downturn of the global semiconductor industry in the past two years, this measure to increase investment in the manufacturing industry has continued unabated. Not only the "big fund" has vigorously supported local IDM and wafer generation factories, but local provinces and cities have also spared no effort in building wafer factories. Many IDM and wafer foundry projects come one after another.

Coincidentally, in the past two years, the United States has also emphasized the return of its local manufacturing industry, including semiconductor manufacturing, which has given many preferential policies and financial support to enterprises with new factories in the United States.

It can be said that, compared with IC design and closed testing, the scale and level of chip manufacturing is the core element to test the development level of the local semiconductor market, including IDM and wafer foundry.

In the United States, Intel Corp, Texas Instruments Inc (TI) and lattice core represent the highest level of semiconductor manufacturing. Among them, Intel Corp is IDM, ranking first in the global semiconductor market for a long time, mainly designing and manufacturing logic chips represented by CPU, as well as NAND flash chips. TI is also IDM, which also ranks first among global analog chip manufacturers, mainly in the design and manufacture of high-performance analog chips. Lattice core is a fab foundry, ranking third in the world, second only to Taiwan Semiconductor Manufacturing Co Ltd and Samsung.

In Chinese mainland region, looking around the semiconductor manufacturing industry, there are few large-scale and internationally influential IDM, which is also the main reason for vigorously advocating the revitalization of local IDM in recent years, so, as a representative of Chinese mainland chip manufacturing, only from the wafer foundry to find, and its representative enterprises are Semiconductor Manufacturing International Corporation and Huahong.

Among the three leading semiconductor manufacturing enterprises in the United States, Intel Corp undoubtedly ranks first in terms of history, market influence, process level, or revenue capacity. At Chinese mainland, Semiconductor Manufacturing International Corporation has high hopes, and he ranks fifth among global foundry foundry companies, the highest among similar enterprises in the mainland, and has become the most concerned and anticipated local chip manufacturer.

Therefore, it can be said that Semiconductor Manufacturing International Corporation and Intel Corp are the most outstanding representatives of Chinese mainland and the United States in the field of semiconductor manufacturing, and are at the peak position in their respective markets. Of course, the formats of the two enterprises are different, one is the wafer generation factory, the other is IDM, but for chip manufacturing, the two formats have a high degree of similarity and comparability.

History

Intel Corp has gone through 51 years. In July 1968, an electronics company named Moore Noyce was quietly born in California, USA, founded by two engineers: Robert Noyce and Gordon Moore. Soon after the company was founded, the two founders found that the name Mornoise sounded like More Noise (more noise). So they decided to change their name. They thought of the English word Intelligence, which is very similar to Integrated Electronics. So they decided to change the name of the company to Intel.

After Intel Corp was founded, its main business was memory, but with the increasingly fierce competition, its memory business gradually declined, so Intel Corp was forced to step up the development of new product lines and develop into the microprocessor market. In 1971, Intel Corp developed the world's first commercial processor-Intel 4004. In 1978, Intel Corp produced the famous 16-bit 8086 processor, which was the first x86 processor in history and later became a standard platform for personal computers. Since then, after a series of market competition twists and turns, Intel Corp has gradually reached the pinnacle of the global processor market and achieved today's CPU empire.

Comparatively speaking, Semiconductor Manufacturing International Corporation is a young company, founded by Zhang Rujing in 2000, the company has stumbled along the way, during which a lot of stories have happened. For a long time after its establishment, Semiconductor Manufacturing International Corporation is in a state of loss. However, for a chip manufacturing company with heavy assets, this is a necessary stage of development, in this process. The company has also experienced patent litigation, CEO change and so on. After years of touching, crawling and rolling, it has finally entered a stage of benign development and become the most concerned chip manufacturing enterprise in Chinese mainland region.

Fab and its production capacity

Intel Corp has a large number of fabs. About 70% of the processors and chipsets are produced in American fab factories. There are seven factories, including Arizona, Oregon, New Mexico and Massachusetts. Most of them are 12-inch wafers. Among them, Massachusetts is Intel Corp's last 8-inch fab. The company's mainstream 14nm process is mainly produced in D1X fabs in Arizona and Oregon in the United States, while overseas 14nm wafers are mainly Fab 24 in Ireland.

In addition, Intel Corp also has a fab in Dalian, China.

In recent years, Intel Corp is also developing wafer foundry business, but due to the late start, the industrial ecology has been almost unbreakable, so it is very difficult to expand in this market.

Semiconductor Manufacturing International Corporation, for its part, has a 12-inch fab and an 8-inch fab in Shanghai, a 12-inch and a holding 12-inch advanced process fab in Beijing, and an 8-inch fab in Tianjin and Shenzhen. the company has 12-inch fab plants under construction in Beijing and Shanghai, mainly for its upcoming mass production. Or the most advanced process technology that can achieve mass production within three years to prepare the plant and equipment.

The comparison of the two chip manufacturing plants of Intel Corp and Semiconductor Manufacturing International Corporation is not intuitive. In fact, their production capacity is still very different, and Intel Corp has obvious advantages. However, at present, the capacity utilization rates of these two companies are very high. Intel Corp's 14nm processors are already in short supply, and they are stepping up the expansion of factories and the introduction of equipment in many plants around the world, so as to meet the needs of the market as soon as possible. Moreover, the company is further seeking OEM help from Taiwan Semiconductor Manufacturing Co Ltd to alleviate its current production pressure in 14nm process processors. With the increase of local customers in China, Semiconductor Manufacturing International Corporation's capacity is also close to saturation, the utilization rate has reached about 97 per cent, and the construction of new factories is also speeding up.

Revenue and gross profit margin

Intel Corp's revenue in 2018 was about $70 billion, roughly the same as last year in 2019. In addition, Intel Corp has maintained a high gross profit margin, which has been basically stable since 65% in 2011 and reached 61% in 2018, a level that is absolutely leading in the semiconductor manufacturing industry as a whole. This kind of profitability mainly depends on the high performance of its products and the strong price control ability after the formation of market monopoly.

At the end of October, Intel Corp released its latest quarterly results, which showed that the company had revenue of $19.19 billion in the third quarter, roughly unchanged from $19.163 billion in the same period last year, and net profit of $6 billion in the third quarter, down from $6.998 billion in the same period last year.

Semiconductor Manufacturing International Corporation, for its part, released Q3 results on Nov. 12, with revenue of $816.5 million, up 4% from a year earlier, gross profit of 20.8% and net profit of $84.626 million, up 1014% from $7.591 million in the same period last year.

These two financial reports fully reflect the characteristics of the two companies, that is, in terms of revenue and gross profit margin, the industry giants have an overwhelming advantage, while in terms of year-on-year growth, the growth advantage of young enterprises is very obvious.

Advanced process and mass production level

In terms of advanced process, at present, Intel Corp has mass produced 14nm on a large scale, and its production capacity is very tight, and its 10nm has recently begun mass production after years of delay, which is expected to make up for its lack of 14nm production capacity. As early as 2013, Intel Corp hoped to let 10nm take over 14nm by adopting SAQP (Self-Aligned Quad Patterning) and new packaging technology, but this goal was not achieved until this year.

Intel Corp will launch a number of 10nm products at the end of 2019 and 2020, including 10nm server products launched in the first half of 2020.

In terms of 7nm, the company says it will achieve mass production by 2021. It is reported that 7nm will be the process node of Intel Corp's first use of EUV process.

For Semiconductor Manufacturing International Corporation, 28nm has been in mass production. In 2018, its 28nm HKC+ process development was completed, which means that the company has mastered the 28nm technology, completed the progress from the lower end of 28nm PolySion, to 28nm HKC, and then to 28nm HKC+, and from 2019, its 28nm has entered a mature stage.

However, in the third quarter of 2019, the proportion of the company's 28nm process was only 4.3%. In fact, Semiconductor Manufacturing International Corporation has always held a very conservative attitude towards expanding 28nm production capacity, and this is still the case at present, mainly based on the fact that the main competitor 28nm is already very mature and mainstream, and the risk of production expansion is large, so it is easy to fall into the whirlpool of price war. Therefore, Semiconductor Manufacturing International Corporation put his main resources on conquering 14nm/12nm FinFET. And the research and development of the next generation 7nm process.

At present, Semiconductor Manufacturing International Corporation's 14nm has entered the stage of mass production, and 12nm has also begun to introduce customer verification.

In early 2017, Qiu Ciyun, then CEO of Semiconductor Manufacturing International Corporation, and Zhao Haijun, CEO who succeeded him in May of that year, both mentioned that Semiconductor Manufacturing International Corporation would start research and development of 7nm technology in 2017. Up to now, Semiconductor Manufacturing International Corporation has not disclosed the relevant progress, optimistically estimated that the company is expected to start mass production of 7nm by the end of 2021.

Comparing the production situation of the two companies' advanced processes, the gap is narrowing faster and faster, especially 7nm. Optimistically, Intel Corp and Semiconductor Manufacturing International Corporation are expected to achieve mass production in 2021 at the same time. If it comes true, for Semiconductor Manufacturing International Corporation, this is not easy, but also an exciting progress.

Conclusion

As the leading chip manufacturing enterprises in the two major economies, Semiconductor Manufacturing International Corporation and Intel Corp can be seen as the epitome of the scale and level of chip manufacturing in these two markets, both in the past and in the future.

From the perspective of history and the present, Semiconductor Manufacturing International Corporation is at a disadvantage, but from the perspective of the speed of development and the future, there are many things to look forward to.

The most important thing is that the existence of Semiconductor Manufacturing International Corporation is of great significance to the Chinese mainland semiconductor industry: making money is the second thing, but to support the autonomy of the high-level semiconductor manufacturing industry, and then promote the improvement of the entire design, manufacturing, closed testing industry chain. At the same time, it can also provide support for upstream local semiconductor equipment and material manufacturers.