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Behind arm's "palace fight" in China: China's "core" re exposed short board

via:CnBeta     time:2020/6/13 8:01:43     readed:209

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Recently, Anmou Technology (China) Co., Ltd., that is, ARM China on its CEO Wu Xiongang has become the focus of public opinion. And has Wu Xiongang been removed? Are procedures compliant? ARM different statements within China are driving the industry into confusion. The final outcome remains to be seen.

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However, given that arm is a chip enterprise authorized by IP, and in combination with the aggravation of non market competition factors, arm's "palace battle" in China once again revealed the short board of China's chip industry from the technical perspective, that is, semiconductor IP.

Semiconductor IP Authorized, less than 2% of Chinese companies

So called IP (Intelligent Property) refers to those reusable design modules with independent intellectual property function in semiconductor integrated circuit design. With the progress of chip integration technology and the change of market demand characteristics, the importance of IP in integrated circuit design is increasingly highlighted. More and more integrated circuit designs are based on semiconductor design IP. In this regard, some insiders have made image metaphor: if designing and manufacturing chips is like building a house, then IP core is brick, door frame and window, which shows the important value and significance of semiconductor IP. So the question is, what is the level of semiconductor IP in China?

According to ipnest data, in 2019, arm, Synopsys and cadence respectively have 40.8%, 18.2% and 5.9% market shares (calculated by revenue) in the world, among which Synopsys and cadence have a total market share of 24.1%, which shows that the UK and the US are absolutely leading in the field of semiconductor IP licensing.

Among them, arm, the protagonist of Gong Dou, is the IP supplier of CPU, GPU, Vpu, DPU and other products, especially its CPU and GPU, which have considerable influence in the mobile market and embedded market.

By contrast, Chinese mainland semiconductor IP authorized manufacturer has only one of the top ten, but only accounts for 1.8% of the market share. Even so, there are quite a lot of disputes in the IP authorization business of core microelectronics.

Xinyuan microelectronics conference, semiconductor IPDelegation of authority

It may be due to the game of non market factors. Recently, China's relevant chip companies have taken the opportunity to land on the science and technology innovation board, including the core microelectronics just passed the meeting.

Core original microelectronics prospectus shows that it has two main business, one is outsourced chip customization business (including chip design and chip production), the other is semiconductor IP licensing business, revenue from the collection of licensing fees and the use of customers to use the company's IP design to complete the corresponding product sales.

As for the semiconductor IP licensing business involved in this paper, the prospectus shows that the core microelectronics currently has five types of processor IP, i.e. graphics processor (GPU), neural network processor (NPU), video processor (NPU), digital signal processor (DSP) and image signal processor (ISP), as well as more than 1400 mixed digital analog IP and radio frequency IP.

However, from the perspective of the development process of core microelectronics, especially the relevant M & A during the period, the above-mentioned processor IP is all acquired through external M & A, not completely independent innovation.

What's more, the CPU IP of the core microelectronics is almost zero. As arm is one of the core suppliers of core microelectronics, even if there is a separate CPU IP authorization occasionally, it is basically the "improvement" of arm IP. Under non market competition factors, it will also be controlled by others.

In fact, it is not only core microelectronics, but also so-called domestic well-known IP manufacturers such as Huada Jiutian, nerco micro, IP goal and ACTT. Their IP authorization is mostly concentrated on interface IP, and the IP on core general-purpose CPU and GPU is basically blank.

So the question is, why are domestic IP manufacturers so backward in semiconductor IP? Is there any other reason besides the accumulation of history?

The lack of investment, efficiency, ecology and focus makes it difficult for domestic enterprises to lose armTop priority

As mentioned above, semiconductor IP is the foundation of the chip industry, with the characteristics of high barriers and high commercial value. To maintain these characteristics, continuous R & D investment is fundamental. But in this respect, there is a huge gap between domestic enterprises and foreign enterprises. We take arm and known as "the king of China's semiconductor IP" as a comparison to understand the gap intuitively.

Look first ARM, after being acquired by Softbank Corp. in 2016, ARM investment in R & D has increased year by year. According to Softbank Corp., in 2017-2019, ARM R & D investment in more than $700 million, accounting for about 40 percent of total revenue.

In contrast, in 2017-2019, the R & D expenses of Xinyuan Co., Ltd. were RMB 332 million, RMB 347 million and RMB 425 million respectively, and the R & D expenses accounted for 30.71%, 32.85% and 31.72% of the operating revenue in the same period.

From this point of view, whether it is the proportion of R & D or the absolute cost of R & D, there is a gap between core microelectronics and arm. Among them, the absolute cost of R & D, arm is about 11.5 times that of core microelectronics.

What makes us feel powerless is that in 2019, arm's revenue is more than 23 times that of core microelectronics, which shows that arm not only invests in R & D, but also far exceeds core microelectronics in R & D efficiency, thus proving the high value of IP from one side.

In addition to R & D, the competition among IP companies also depends on the ability to build an ecosystem. Arm can become the king of the mobile era. In addition to the core IP such as CPU and GPU architecture, it is also to establish an integrated ecosystem of IP cores, chips and applications with many partners.

For example, since 2016, arm has contracted 479 customers, 511 customers and 529 customers, and authorized 1557, 1694 and 1767 customers. In contrast, core microelectronics has granted IP authorization to more than 250 customers, and the total number of authorizations last year was only 65. It should be noted that more than 250 customers of core microelectronics are only accumulated, while arm's customers are the absolute number every year. We can see the ecological gap between them.

I don't know. I'm scared. After all, since the establishment of Xinyuan microelectronics in 2001, it has been nearly 20 years. If we start to focus on the IP licensing business and build the core competitiveness, even if there is a gap, it will not be so big today?

The fact is that up to now, this enterprise with the so-called "king of China's semiconductor IP" title is really famous in terms of its business focus and revenue composition.

According to the prospectus of Xinyuan microelectronics, the main revenue is still from one-stop chip customization business, with 74.08%, 70.54% and 67% respectively from 2017 to 2019. By contrast, the core IP licensing business barely managed to generate more than a third of its revenue in 2019.

The reason for this is that, according to the core microelectronics, the price may be low in order to improve the chip design technology and accumulate relevant experience, which may lead to the loss of strategic design projects and lower the gross profit margin of chip design business, such as Facebook, Sony and other related projects. At the same time, the products cooperated with Bosch are relatively mature, the revenue scale is high, and the gross profit rate is relatively low, which has a certain impact on the gross profit rate of mass production business.

In the face of this euphemism, we believe that the most likely fact is that the one-stop chip customization business of MPM itself has limited gold content and has to use the price to grab the order. The other is that the value of the project outsourced to MPM itself is not high. MPM only acts as a low-level contractor.

summary

When we understand the above-mentioned domestic "king of semiconductor IP in china" core original microelectronics own strength, especially with ARM in semiconductor IP authorization related contrast, it is not difficult to understand amou technology (china) co., ltd ." Gong Dou "necessary and helpless, in the domestic semiconductor IP top enterprises are difficult to lose the ARM, only through the high-level maintenance or departure, as far as possible in favor of our semiconductor licensing policies, but everyone knows that the most hard core technology in the hands of others, The best way to play is naturally our hardcore technology and products.

As we all know, in the face of increasingly uncertain non-commercial competition factors, more and more enterprises related to the chip industry in China will move from behind the scenes to the front stage. While we see hope, we also find out why some enterprises always fail to show their own problems and shortcomings at critical moments. Whether the chip industry in China can really rise in the future depends on each enterprise participating in it First of all, the industry should face up to these problems and short boards. Otherwise, listing or government subsidies will eventually become a feast of "opportunism". The so-called independent leadership is only the "mouth gun" of "Ah Q".

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