Here are the two most important recent news for the chip industry. One is that the Biden administration signed the Chips & Science Act. The other is that a number of domestic chip bosses were investigated.
The two messages seem to be unrelated, but they are actually very meaningful. The layman watches the fun, the layman watches the doorway. Behind these news, it may herald the coming golden decade of China's semiconductor development.
Let’s talk about the “2022 Chip and Science Act” that Biden signed into effect on August 9. Judging from the name, juxtaposing chips and science shows that the United States attaches great importance to chip technology. Obviously, the United States believes that the chip field is one of the most critical areas to compete with China's technology.
The American media attaches great importance to this chip bill, and considers it "one of the most influential and far-reaching bills in the history of the United States" and "the most significant intervention of the US government in industrial policy in decades."
The total amount of the bill is as high as 280 billion US dollars.
Among them, 200 billion US dollars are used for scientific research assistance, supporting scientific and technological research and development and training programs, covering robots, 5G computer computing and semiconductors, of which 81 billion US dollars are allocated and processed by the National Science Foundation NSF to reward robots, artificial intelligence, high-performance Scientific research and development such as computing and semiconductors ensure the United States' global leadership in science and technology.
$52.7 billion for semiconductor manufacturing facilities and expansions, as well as direct financial grants for other projects.
$24 billion for tax breaks, providing a 25% tax break for setting up fabs or wafer fabs in the United States.
The most important thing is that the enterprises receiving subsidies are not allowed to expand the advanced production capacity of semiconductors in China and other unfriendly countries in the next ten years. The production capacity of mature processes is not limited, but the definition is unclear and there is a lot of room for operation.
Seeing these, many from the media shouted that the hard days of the domestic chip industry are coming.
I don't think so.
What the United States hopes to see is that advanced chip manufacturers have set up factories in the United States in order to subsidize them.
Then there is the definition of advanced technology and mature technology, the bill is not clear. Similar to banning the sale of EUV lithography machines to mainland China, and later preparing to ban the sale of DUV lithography machines. Therefore, it cannot be ruled out that the United States will restrict mature processes such as 28nm as advanced processes in the future.
You may think that the domestic production of 28nm process will not be affected. Don't forget that the chip industry chain is very long, and the United States occupies an important position in the upstream. Therefore, the United States is still able to inflict damage on our mature craftsmanship.
If the production capacity of advanced technology reaches the United States and we are unable to break through, it will have an impact on our chip design industry. If the chip is designed and finally produced in the United States, how can it be safe?
It is precisely because we must overcome the problem of chip manufacturing bottlenecks that I am more optimistic about the prospects of China's chip industry.
Let's not say whether the amount of this bill is enough. To be honest, I doubt that a big factory will go to the United States to set up a factory in order to get a little subsidy. When Pelosi went to Taiwan Province to meet Liu Deyin of TSMC, Liu Deyin directly told him that he was not optimistic about the transfer of chip manufacturing to the United States because the cost was too high. What's more, to get these subsidies, we must give up the opportunity to build factories in mainland China.
I don't think the bill itself is a big deal. To be honest, this amount is not too big or too small. Tens of billions of dollars are distributed to several major chip manufacturers, and the span is as long as ten years. In any case, it is not a lot. To build an advanced technology chip factory, it basically starts with 20 billion US dollars. And most importantly, there are not enough American chipmakers.
Of course, the United States also sees this problem. Therefore, a proportion of the funds are used for personnel training. For example, in addition to the Semiconductor Incentive Program, R&D and workforce development programs will also receive $11 billion in support from the US Chip Fund, which will be invested in the National Semiconductor Technology Center (NSTC), the National Advanced Packaging Manufacturing Program, and other R&D and workforce over the next five years. development projects.
In the $52.7 billion budget, the "U.S. Defense Chip Fund" will receive $2 billion; the "American Chip International Technology Security and Innovation Fund" will receive $500 million to strengthen coordination and communication with foreign government partners; "U.S. The "Chip Labor and Education Fund" will receive US$200 million, mainly for related personnel training.
Therefore, it can be seen that the Chip and Science Competition Act, in addition to stumbling us, includes longer-term policies such as talent training and joint research and development. This is a long-term technology competition plan. There are stumbling blocks, and there are aspects of healthy competition. And healthy competition, we welcome.
The fierce competition in the chip industry will continue for more than ten years. Leaders are trying so hard to maintain their position, and if we want to catch up, we must give the chip industry more resources.
The bill emphasizes chip manufacturing rather than chip design. This is because the US is a strong point in chip design. So what is the impact on our chip design industry?
Compared with chip manufacturing, the urgency of chip design is not so great. For example, Huawei can design very advanced chips, but due to manufacturing reasons, it cannot be produced. But why is the preferential policy given by the state, manufacturing and design are treated equally? The preferential policy for chip manufacturing companies is the same as chip design?
I figured this out recently. I really have to admire the level of our policy makers. Think about it, if domestic chip design fails, even if technological breakthroughs in advanced processes are achieved, who will these production capacities be given to? In the context of Sino-US competition, the top design companies in the US will definitely give priority to using US production capacity, while my country's Productivity has no users. In this way, how to return the capital? Without the traction of the market, how can we talk about catching up?
Vigorously developing chip design and developing domestic substitution is actually to find buyers for China's chip manufacturing capacity and provide markets and funds for the technological development of chip manufacturing.
Only when there is a strong market demand, the production capacity of manufacturing enterprises can be used. Design and manufacturing are upstream and downstream relationships, and a well-developed chip design industry will promote breakthroughs in chip design. Of course, we can't wait for design companies to catch up with the United States, and China has its own Qualcomm, Nvidia, and MediaTek to develop chip manufacturing, then it will be too late. Therefore, the design and manufacture develop in parallel and make efforts at the same time.
A lot of investment, including state investment and private investment, what is the most afraid of? That is, the money is not used where it is really needed, and it is cut off by some people.
This is why many so-called bigwigs in the chip industry have been investigated recently. Investment, anti-corruption, both hands, so why can't China's chips develop?
Corruption is very common in industries with large cash flow. Wall Street handles a huge amount of money, so the penalties for insider trading are very heavy and severe. It is unrealistic to rely on consciousness and expect everyone to have lofty ideals to resist the temptation of money. The key to solving the problem is to keep high pressure and crack down on this phenomenon. Clearly, we are on the right track in this regard.
According to the latest survey, 19 of the 20 fastest-growing semiconductor companies in the world are from mainland China.
It is true that we only look at the top ten fabless in the world, and we still have a big gap. While acknowledging the gap, we should also see the speed at which we are catching up. In 2000, almost no one knew that China's GDP would surpass Japan's in 2010. In 2010, almost no one knew that four years later, China's GDP could reach twice that of Japan. If you look at things from a static perspective, you will never understand the world.
The Chip and Science Competition Act, in a sense, formally established that chips are the main battlefield of Sino-US technology competition. In order to win the victory, the two sides will inevitably put a lot of resources and funds into it. Therefore, as practitioners, entrepreneurs, and engineers, you don't need to worry about the uselessness of heroes. What you need to worry about is whether you have enough ability to create more value.
Stay calm at all times, and see the dangers when others revel, and the opportunities when bad news comes. This is the mature way of thinking.
Just as Trump's technology war has put China's chip industry on the fast track, setting off a wave of domestic substitution of chips. The chip bill signed by Biden will be the beginning of a golden decade for China's chip development.
Everyone, please fasten your seat belts.