In 2001, Hua Hong Semiconductor, the executor of China's number one chip autonomy project, hit a high wall.

In the late 1990s, when Moore's Law accelerated and the global chip industry competed fiercely, South Korea's Samsung and Hynix came from behind to beat Japan and the United States to win the competition for DRAM memory chips and become a major player on the semiconductor card table.

Inspired by South Korea's success in overtaking, the central government also invested billions of yuan to set up Huahong, trying to use a national project and cooperation with Japan to fight a beautiful battle to bring China back to the main card table of semiconductors.

Uncoincidentally, two years after Huahong was put into production, the market of DRAM memory chips suddenly plummeted, and the unit price fell by as much as 90%. The Japanese joint venture, which originally underwrote considerable production capacity, was too busy to take care of itself, and immediately produced a huge loss of 1.4 billion yuan.

What should I do if I get off to a bad start?

The core problem of Huahong is that it is unable to catch up with the pursuit and the demand is not up to date.Huahong signed a contract with Japan in 1997 to introduce a chip production line based on 130nm process. Four or five years later, it has lagged far behind the mainstream. At a time when Japanese DRAM orders are in the doldrums, in order to fill the huge gap in production capacity, officials have arranged ID cards and SIM card chips related to the national economy and people's livelihood. But in addition to the products delineated by the government, some highly market-oriented products are needed to really boost Huahong's competitiveness.

At this time, the power semiconductor entered Huahong's line of sight.

Power semiconductors, also known as power electronic devices, generally refer to chips that deal with power. Its main function is to process the complicated electricity into the specifications required by the terminal products, such as the current output from the battery of the electric vehicle, through different power chip processing, not only can drive the motor, but also can drive the air conditioner and audio.

Just like a cook who is good at cooking, he presents the ingredients in different regions to meet the needs of different diners.

Since the thyristor was invented by Bell Labs in 1956, power semiconductors have developed along a clear vein and the pattern is relatively stable.

In the technical trend, the electric power that can bear and control is complex step by step, and the category develops from BJT and GTO to MOSFET and IGBT, and the circuit structure has strong continuity.

In the process, the development is not as leaping as the digital chip, the progress is relatively slow, and micron-level equipment can also be competent.

In the market structure, the focus of competition mainly lies in the organic combination of human process experience (know-how) and equipment, that is, "man-machine combination". Therefore, Germany, Japan, the United States and other established manufacturers firmly occupy the majority of the market share.

All in all, this is a track that can "snowball". As long as you keep working hard, you can occupy a place.

For Huahong, power semiconductors are an excellent choice to get rid of exponential inputs and losses: as long as you maintain the current process and introduce the experience of Japan-US joint ventures, you can develop gradually along the ladder of technology.

So, in 2002, Huahong made a decision to enter power semiconductors.

This is the right choice. Over the past two decades, under the influence of Huahong's transformation, the power semiconductor industry has taken root and sprouted in the Yangtze River Delta, benefiting from upstream to downstream:

The first is contract manufacturer Huahong, which has made profits for 40 consecutive quarters. The production capacity of the newly built 12-inch wafer factory in Wuxi has accelerated, stepping up the pursuit of large international companies.

Secondly, those designers who have developed on Huahong's back have expanded ferociously in the category of power semiconductors since the establishment of Kechuang Board, which is mainly engaged in IGBT semiconductors and MOSFET.

Finally, the downstream industrial control and new energy manufacturers, in the current shortage of all kinds of chips, Huahong and domestic designers work together to promote domestic substitution, providing a more economical and practical choice.

More importantly, the development of power semiconductor industry provides a choice for Chinese chips to accelerate in the current straight road: the third generation semiconductors. The news that the chief of staff led the "chip confrontation" project, which was reported in the media, revealed that the historical coincidence and fate of national projects are linked.
So, how did the power semiconductors in the Yangtze River Delta develop? This paper attempts to divide it into three stages:

From 2002 to 2011, location: double cycle of market and technology of power semiconductors

From 2011 to 2019, Renhe: the division of labor between the "908 School", the returnee School and Hua Hong.

2019, Timeless: the chain reaction of capital, market and division of labor.

1. Geographical location

Huahong chose the power semiconductor track in 2002 and happened to be at a historic turning point:

Demand has soared:China's accession to the WTO has led to a great increase in the demand for power semiconductors in Jiangsu, Zhejiang and Shanghai. As the first industrialized area to develop after the reform and opening up, Jiangsu, Zhejiang and Shanghai are the first to enjoy the trade dividend of the rapid increase in exports. As long as there is a factory, there is a demand for motors, and there is a demand for power semiconductors.

Industrial agglomerationMotor and power semiconductor enterprises from the United States, Japan and Europe have been attracted by the policies of local industrial parks, thus forming a closely linked industrial cluster in the Yangtze River Delta. Infineon, Xiantong and other foreign businessmen have set up R & D centers in Shanghai, Wuxi and other places, the downstream application and R & D links of power semiconductors are closely integrated, and the circulation of industry know-how is accelerated among regions.

Talent base:The two major national projects before and after 908 and 909 have trained a large number of talents for the chip industry in the Yangtze River Delta, many of whom have been dispatched or taken the initiative to study abroad and returned to the Yangtze River Delta after learning advanced technical and theoretical experience. Singapore Chartered Semiconductor at the turn of the century was the training and gathering place for Chinese chip talents at that time. In order to attract outstanding young people, the Singapore government has set up recruitment sites in places such as Suzhou Industrial Park, and has given per capita settlement expenses of about US $1500 to US $2000.

Under the action of three conditions, Huahong has become the world's first 8-inch power semiconductor foundry, and has gradually established a process platform in the past decade.Along the product roadmap of power semiconductors, the medium and low voltage MOSFET is introduced first, and then the medium and high voltage IGBT. The chip withstands high voltage, the circuit structure is complicated, and the yield is gradually increasing and becoming more and more mature.

In 2011, Huahong basically established the dominant position of power semiconductor foundry.In that year, discrete devices in power semiconductors shipped more than 2 million 8-inch wafers, ranking first in the world. At the same time, Huahong's 1200V high voltage IGBT products have been successfully mass produced. In the two most widely used power semiconductors, Huahong has established a complete, mature and high-quality foundry capacity.

Next, around the domestic substitution of power semiconductors, the two groups of people have combined with the production capacity of Huahong, forming the industrial pattern of today's Yangtze River Delta.

2. Renhe

The power semiconductor talents in the Yangtze River Delta can basically be divided into two groups:

One is the "908 school" represented by Huarun Wei.As early as 1989, the central government set up Huajing Company to undertake the task of tackling key chip problems. At that time, it specially introduced talents from Yongchuan 24 Institute and began to study MOSFET in power semiconductors.[1]. Later, Huajing was burdened with heavy debts as a result of undertaking the "908" project, and then became Hua run Wei. Unlike Huahong, which focuses on power semiconductor contract manufacturing, China Resources Micro mainly designs and manufactures IDM with closed testing.

In the long-term operation, China Resources Micro has trained a large number of talents. Undertaking national engineering is a process of high-intensity technology learning, and many young engineers are sent abroad to study the design and manufacture of power semiconductors. Attracted by the private economy, many talents go to sea to start their own businesses.

Zhu Yuanzheng, founder of Xin Jie Neng, is one of the typical examples. He entered Huajing as early as 1988, and then was assigned to the newly established MOS factory, and then studied in Singapore, worked in foreign companies, and returned to China Resources Micro Research and Development IGBT. After absorbing sufficient experience from abroad and at home, he went to sea to start a business in 2009, with the support of Changdian, a closed testing giant in Jiangsu, to establish a new Jianneng.

The other is returnees. Most of this group are talents who have worked in large overseas power semiconductor companies, such as Infineon in Germany, International Rectifier Company in the United States, Renesas in Japan, and so on. After working abroad for many years, they have mastered the core knowledge and experience of power semiconductors and returned to the Yangtze River Delta to start a business.

Shen Hua, the founder of Starr semiconductors, is a typical example of this school. After graduating from his PhD, he worked for Infineon and International Rectifier, and returned to China in 2005 to establish Starr, aiming at the then blank IGBT power semiconductor market.

Whether it is the local "908 school" or returnees, when they have accumulated sufficient technical experience to start a business in the sea, the first choice in the power semiconductor industry is to be a pure designer first. The design of power semiconductors is not as dependent on advanced EDA tools and IP as digital chips, and mainly depends on the experience of "old masters", so pure design can give full play to the advantages of entrepreneurs.

Before there was no power semiconductor foundry, people with design capabilities could only be attached to IDM. The contract manufacturing ability formed by Huahong provides a good choice for these entrepreneurs at the right time. Because it has three advantages:

Deepening the division of labor: Huahong has formed several general process platforms, so that the design factory can improve in the design link and focus on the research on the downstream market, while Huahong's process platform has gradually enhanced its reliability through the experience of many design factories.

The supply chain is closely coordinated: the four Huahong plants are located in Shanghai and Wuxi, and the space distance between the design plants in Jiangsu, Zhejiang and Shanghai is very close, and the supply chain coordination is convenient. What problems can be dealt with quickly, Xinjianneng, which is located in Wuxi, is only three traffic lights away from Huahong 12-inch factory.

Joint R & D: also because of the close distance, it is easier to synchronize ideas between the designer and the contract factory.

After 2010, under the background of difficult operation of the manufacturing industry and striving to reduce costs, the domestic substitution of key components has been carried out quietly. With the above three advantages, Huahong joined forces with the "908 faction" and the returnee faction, and the localization rate in the field of power semiconductors gradually increased. At the same time, Huahong made enough profits to be able to build a 12-inch wafer manufacturing plant in 2018. After completing the category coverage of power semiconductors, Huahong began the pursuit of the process.

3. Celestial time

By the establishment of Science and Technology Innovation Board in 2019, the power semiconductor industry in the Yangtze River Delta will usher in a new round of development opportunities. Capital began to pour into the chip industry on a large scale, providing ample ammunition for weaker power semiconductor designers to enter new markets.

At the same time, China's rapid development of new energy vehicle industry has also provided sufficient downstream demand for local power semiconductor manufacturers:

Shorter certification time:The shortage of automotive chips has made local automakers aware of the security of the supply chain. The previous certification process has greatly shortened the unnecessary waiting time, and domestic power semiconductor manufacturers have obtained more and faster certification opportunities.

The category of bicycle power semiconductors increased:The car changed from internal combustion engine drive to electric drive, and the number, category and value of power semiconductors loaded increased significantly, accounting for more than half of the total semiconductor cost from 20%. Vehicle chargers, on-board air conditioners, charging piles and motor controllers have gradually increased requirements for power density and product specifications, providing manufacturers with different levels of opportunities.

The upgrade of the model leads to an increase in value:As China's new car-building forces have a place in high-end electric vehicles, vehicle upgrading has brought about a "consumption upgrade" of in-car power semiconductors. BYD's Han EV and NIO Inc. 's ET 7 both use powerful silicon carbide power modules to catch up with or even catch up with Tesla, Inc. 's 100-kilometer acceleration experience. Local automakers' active attempts in product specifications will provide more imagination for manufacturers.

It is no exaggeration to say that power semiconductors are as important to new energy vehicles as batteries, and it is precisely because of their importance that the supply chain security of power semiconductors is becoming a serious concern for designers in the global market where wafer manufacturing capacity is in short supply.

In order to ensure the supply of production capacity, the designer has taken three measures:

One is to strengthen cooperation with Huahong. Starr and Huahong have reached a strategic cooperation with their 12-inch IGBT.

The second is to find suppliers outside Huahong. Xinjie Neng's OEM procurement proportion for Huahong is decreasing year by year, increasing overseas manufacturers as secondary supply, so as to reduce supply chain risk.

The third is to build a factory directly. Starr is the most radical in the transformation of the design factory. At the beginning of this year, it raised 2 billion yuan to purchase lithography, development, etching and other equipment cover plants, with a design capacity of 360000 pieces of power semiconductors for high-voltage characteristic processes and silicon carbide.

This marks that the new generation of power semiconductors in the Yangtze River Delta has gradually begun to use the power of the capital market to change from a pure design factory to an IDM to attack the global power semiconductor giants in the way of group fights. At the same time, Huahong, which has carried many design factories, is faced with challenges and is forced to upgrade and make more differentiated layouts.

4. The end

At present, the domestic substitution of the chip industry has long been a belief deeply rooted in people's hearts, and it is also an indisputable fact that is happening.

It can be said that today, the "capitulationists" in China's chip industry, or borrowlism that "it is better to build than to buy", has lost its base. The mass forces distributed in the upper, middle and lower reaches of the electronics industry have long recognized the cruel reality and direction under the friction between China and the United States.

However, now there is a very dangerous argument, advocating the theory of "quick victory". Domestic substitution seems to be just around the corner, and satellites are placed everywhere, which is extremely undesirable.

From the case of Huahong, we can sum up a law that there is no autonomy and naturally no hope for the development of China's chip industry. However, if we want to develop independently, it must be a "protracted war." In order to win a protracted war, we must take root in China's market soil, make a lot of friends, and finally gain strategic advantage with the mass line, so that we will be able to compete with overseas manufacturers.

At the same time, the case of Huahong also tells us that the pace of industrial development and the growth cycle of talents cooperate with each other, no matter how the industrial development is, talents can not be out of gear.Although the national projects of "908" and "909" were once miserable and retired from the pursuit of advanced processes, they have cultivated talents and stages for power semiconductors in the Yangtze River Delta region, and at the moment of competition among big countries, it provides another option for the straight acceleration of China's chip industry.

Therefore, the process of localization is more about observing the cultivation and development of talents and platforms, rather than the schedule of the process.

After all, the land is lost, people and land are lost, people and land are lost.