Recently, I am on a business trip in Shanghai, asking for production capacity from the Fab factory.

This is what the author heard most when chatting with entrepreneurs in the chip industry recently. One of the main reasons for this situation is the outbreak of several products.

As we reported before, because of the rising demand for CMOS image sensors, the popularity of Bluetooth master chips such as TWS headphones, and the incentive effect of Huawei's supply chain transfer to China. Domestic wafer factories in the overall decline in semiconductors ushered in the reverse trend growth. The capacity utilization of fabs is also rising day by day driven by these applications.

For example, we are more concerned about the master control of TWS Bluetooth headsets, according to industry sources told semiconductor industry observation reporters, now domestic manufacturers, including China Science and Technology Blue News and Jerry, are facing a severe shortage situation, and the delivery cycle of Bluetooth master chips given to them by the chip factory has also been postponed from the previous spot to eight weeks now. The existing Bluetooth chips on the market have also been oversold by relevant traders.

Another round of the market of the fab has officially opened. Who on earth will be the promoter among them? Who will be the big winner?

Driven by the surge in demand for CIS

Sony Group Corp's revenue in the third quarter of this year reached $2.688 billion, up 41.5 per cent from $1.899 billion in the previous quarter, according to a report released by market analyst IHS Markit. What's more, relying on the rapid growth of products, the company's revenue ranking among global chip manufacturers jumped from 15th in the previous quarter to ninth in this quarter, and this growth rate is also the largest among the top 10 manufacturers.

From the data of Sony Group Corp, we can see the demand for CIS chips, which is mainly driven by the upgrade of smartphone cameras.

According to Sigmaintell, global sales of smartphone camera sensors will reach $11.6 billion in 2019, an increase of 41 per cent over the same period last year. Starting from next year, the mainstream rear cameras in the future will develop in the direction of large wide-angle main camera + video shooting + large telephoto + ToF. Coupled with the front camera, you can see the continuous growth of related CIS demand from here.

In addition to mobile phones, the steady growth in security demand has also contributed to the development of CIS. Recent data from industry research firm IHS Markit pointed out that as governments and companies invest more in security networks, there will be more than 1 billion surveillance cameras in the world by 2021, and the demand for CIS here is extremely objective. Behind these applications are the original CIS factories such as Sony Group Corp, Samsung, OV, Gekovi, Stevie and on Senmei, and wafer generation factories such as Taiwan Semiconductor Manufacturing Co Ltd (TSM.US), Semiconductor Manufacturing International Corporation (00981), Huahong Hongli (01347) and Wuhan Xinxin, as well as closed testing companies such as Anqu, Sunmoon and Jingfang.

As previously reported, CIS is mainly divided into two categories: mobile phone and security. Among them, mobile phones are basically made using 12-inch 55nm technology, while security chips are made using 0.11um 's eight-inch process. In the domestic wafer generation factories, Semiconductor Manufacturing International Corporation, Huahong Hongli and Wuhan Xinxin are the big players. Recently, Guangzhou Yuexin, a new 12-inch factory in China, has also won the favor of local big customers in CIS, and the company is introducing related products into production.

According to the semiconductor industry observation reporter learned from friends in the relevant supply chain, with the shortage of production capacity of these wafer factories, the wafer delivery of the relevant CIS chips has been extended to four months, and in terms of packaging, the time required has also increased by two to three weeks.

In addition, this phenomenon is exacerbated by the popularity of off-screen optical fingerprinting schemes that use the same process as CIS. "because the Die Size of the optical sensor under the screen is relatively large, the number of Die originally cut by each wafer is not much, with the increase of its demand, this makes the supply of CIS more stretched," a person involved in the industry chain said in an interview with Semiconductor Industry Watch. "in today's CIS manufacturers, whoever has the power of the factory will be the boss," he continued.

Industry Carnival brought by TWS Bluetooth headset

Before we were entitled"the unit price fell below two yuan, and the Bluetooth chip of TWS headset went into the sea of blood."In this article, we take the lead in reporting the current situation of Bluetooth master control of TWS headphones in China. According to the article, this product, which is popular under the leadership of Apple Inc AirPods, has completely detonated the enthusiasm of Huaqiangbei people.

However, since this report came out, many people in the industry have told semiconductor industry observers that now TWS Bluetooth master chips have been out of stock since October, and these Bluetooth master chips, which once fell to unimaginable prices, have rebounded from more than one before to four or five.

According to the semiconductor industry observation reporter, now the domestic TWS headset Bluetooth master chip market, in addition to Heng Xuan (Huawei is also? ) and a few other manufacturers are using 40nm to make some products, in fact, most manufacturers mainly use 55nm process to make products. They made this choice mainly because the cost of the former is 1.65 times that of the latter. This is not conducive to improving the competitiveness of chip factories that plan to reshuffle in the white market. From the perspective of 55nm, the large contract manufacturers in China are SMIC's 55nm and Shanghai Huali's 55nm.

Although the current capacity situation has affected the current terminal market, people in the industry chain also told semiconductor industry observers that starting from the first quarter of next year, we can see that the monthly shipments of some Bluetooth chip suppliers, including TWS Bluetooth headset chips, will break through 100KK again, which is enough to witness the popularity of this market.

From the data provided by Counterpoint Research, we can also see that global shipments of Q3 TWS headphones reached 33 million in 2019 and 27 million in the second quarter, an increase of 22.22%. Global TWS headphone shipments reached US $4.1 billion in the third quarter of 2019.

People related to the industry chain told the semiconductor industry observation reporter, according to their observation, Huaqiangbei white-brand TWS headset daily shipments reached 200000, some people said that the domestic non-Apple Inc TWS Bluetooth headphones will reach Apple Inc AirPods 10 times, such a large related chip factory and wafer factory pressure can also be imagined.

In addition to the Bluetooth master, Nor Flash is also another product name promoted by TWS.

It is understood that in order to store relevant information, current Bluetooth headsets are also equipped with Nor Flash, which drives the growth of domestic suppliers, including Zhaoyi innovation, and then brings related pressure to the manufacturers who provide Nor Flash OEM (Semiconductor Manufacturing International Corporation, Huahong Hongli and Wuhan Xinxin). It is said that the recent Nor Flash has reached an one-price situation.

In addition, the demand for PMIC and lithium protection chips brought by TWS has also overwhelmed the relevant wafer factories. But in fact, in these chip markets, the pressure on Huawei's orders to flow back to the fabs is even more obvious.

The impact of the order return caused by the Huawei incident

The outbreaks of the first two products are purely commercial demand-driven. Many manufacturers, including Huawei, see that the US government has made things difficult for Huawei, which has pushed many of their orders back to China, which has brought huge opportunities to relevant suppliers and suddenly strained the production capacity of fab factories.

According to the semiconductor industry observation, Huawei is now exploring the possibility of cooperation with domestic manufacturers with an unprecedented open attitude, in which the domestic replacement of mobile phone RF and FPGA has also become a reality. It is also worth paying attention to the domestic replacement of PMIC and lithium battery protection chips and chips including more discrete devices, which is also an important impact on capacity.

Insiders told Semiconductor Industry Watch that Huawei used products from leading manufacturers such as Texas Instruments Inc and PI on similar AD-DC products in the past, but a series of events this year have made Huawei more willing to cooperate with local manufacturers, which makes the relevant process an urgent need.

First take a look at the pattern of domestic wafer factories in terms of power chips and separate devices. At present, most of the power supply products are completed on an eight-inch production line, and domestic manufacturers in these fields are mainly Semiconductor Manufacturing International Corporation, Huahong Hongli, China Resources Shanghai China, Suzhou Hejian and China Resources Shanghai China. Among them, Semiconductor Manufacturing International Corporation's Shaoxing factory mainly focuses on products such as MOSFET and IGBT, while Huahong Hongli has MOSFET and power management technology (Huahong's), while China Resources Shanghua is based on BCD process, in addition to MOSFET process. Hutchison specializes in LCD Driver and power management products.

SMIC became the first beneficiary after Huawei returned. We know that SMIC is good at logic process, but they are not very good at power supply in the past, but with the addition of Huawei, it has brought a very positive role to SMIC in BCD process. The 0.18 um BCD process, a very important node in the production of power products, is affected by the return of orders from local system factories, including Huawei, and the market demand for this process is rising rapidly. China Resources Shanghai China, which has accumulated for many years in this field, has naturally become the winner. According to the observation of the semiconductor industry, China Resources Shanghua has caught up with the industry-leading East Korean Hi-Tech in 0.18um BCD technology, which is also a key for domestic manufacturers to carry this wave of backflow. Given the huge shipments of Huawei's products, the demand for wafers from these lines is obvious. In addition, many chips, including IGBT and SiC, are also beneficiaries of Huawei's transfer.

In addition, some rumors from Eastern Hi-Tech are also promoting the development of domestic wafer factories.

People familiar with the matter told reporters that Eastern Hi-Tech, which inherited Texas Instruments Inc's 0.35 BCD process, has always been a leader in the industry, and the shortage of domestic production capacity in the past two years has pushed many domestic customers to them. However, recently, there have been media reports and rumors in the market that Hi-Tech in eastern South Korea is giving priority to supporting chip factories for relevant South Korean manufacturers. For this reason, they turn to China to look for new opportunities, which is not only a challenge for domestic Foundry, but also worth looking forward to.

Under this great opportunity, whether local chip factories and wafer manufacturers can take a big step forward depends on the planning of these manufacturers, especially chip factories.