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What does Huawei mean to Chinese semiconductor?

via:驱动之家     time:2020/7/7 6:25:43     readed:149

In the past two years, due to the rapid development of Huawei and the repeated obstruction of Huawei by the United States, the popularity of this IT enterprise has developed rapidly in the past few years. People inside or outside the industry, no matter where they are, are concerned about Huawei's future in the current environment. In my opinion, they are concerned about Huawei not only because it is a Chinese brand, but also because of its significance to China. In this paper, we explore the significance of Huawei to China semiconductor.

华为对中国半导体意味着什么?

Huawei's revenue and profit trend over the years

As shown in the figure above, Huawei's revenue has grown rapidly in the past. In the past 2019, even though it has been blocked by the US government. Huawei's global sales revenue was still 858.8 billion yuan, up 19.1% year-on-year; net profit was 62.7 billion yuan, up 5.6% year-on-year; cash flow from operating activities was 91.4 billion yuan, up 22.4% year-on-year. This figure not only brings us technology accumulation, GDP and employment promotion from Huawei itself, but also industry opportunities brought by huge semiconductor procurement.

According to the report of Gu Neng, a market research company, although Huawei's semiconductor procurement expenditure in 2019 still reached 20.804 billion U.S. dollars, slightly lower than that of 2018's US $21 billion, but still ranked third, second only to apple and Samsung.

In these semiconductor procurement, in addition to foreign investors, the purchase from Huawei's internal Hisilicon and domestic semiconductor is an important impetus to the local semiconductor industry. Especially in the current environment, this role is unprecedented.

Huawei's own chip strength

As far as China's semiconductor is concerned ,Huawei's Hayes chip is the most important direct meaning, compared with the foreign companies competing with Hayes, which was founded in 2004

At first, Huawei Hisilicon opened the door to the market with security chips. In the 21st century, the domestic security industry ushered in an unprecedented golden period of development. The wave of digital security swept the market. During this period, Hikvision, Dahua shares and other enterprises took advantage of the trend. However, most of the chips used for security were still controlled by foreign manufacturers, which provided opportunities for the landing of Hisilicon chips.

Domestic security giants in Dahua shares and Hikvision have thrown olive branches to Hisilicon. In the next few years, Hisilicon's security chips quickly occupied the domestic market. According to relevant statistics, in 2014, Hisilicon security chips had occupied more than half of the global market, with a domestic market share of 90%. After that, Huawei Hisilicon began to expand its mobile chip business.

Huawei Hayes launched its first open-market handset processor in 2009

With years of large-scale R & D investment, finally, in 2017 benefited from the arrival of the 5 G and AI era of Kirin series chips ushered in its highlight moment. That year, Hayes pioneered the introduction AI independent computing modules on mobile phone SoC chips

In 2018, Huawei's terminal business surpassed the operator's business for the first time and became the largest revenue department, which also showed the market's recognition of terminals equipped with Kirin chips. Today, Kirin series chips have been iterated to Kirin 990. In addition, Huawei's baseband chip is also a part of its chip strength, among which Baron baseband chip also plays an important role in Qilin series products. In the process of developing from 4G to 5g, Huawei has become an important promoter of global LTE standards and industrialization. In addition to the development of security and mobile phone market, TV chip is also another chip field of Huawei Hisilicon.

According to previous reports, Huawei began to lay out its TV chip business seven years ago. Its hi3751v600 and hi3751v510 chips have been adopted by several 4K brand TV manufacturers, with a shipment volume of more than 10 million pieces and a domestic market share of more than 30%.

On the current market, TV is gradually developing towards intelligent, high-definition direction, the combination of 8 K 5G also provides a new entry opportunity for Huawei to develop smart TV chips. As time enters 2019, with the launch of Huawei Kunpeng series products, it also indicates that Huawei has once again strengthened its strength in the chip field.

Kunpeng processor is a high-performance data center processor released by Huawei, which aims to meet the diverse computing and green computing requirements of data centers. Huawei also revealed at this year's Huawei developer conference 2020(Cloud)

It is worth mentioning that Kunpeng 920 is a server chip based on ARM architecture, which also promotes arm architecture to enter the server chip market.

华为对中国半导体意味着什么?

Revenue ranking of semiconductor companies in the first quarter of 2020 (source: IC Insights)

Drive the development of domestic industry chain

In terms of Huawei's own chip strength, the advent of 5g and artificial intelligence era has brought him golden opportunities for development. The rapid development of Huawei has aroused the vigilance of some countries, so a series of incidents have broken out, including curbing Huawei's development by restricting its industrial chain.

Under the pressure ,Huawei president of Hayes Ho Tingbo sent out a letter to the staff, in which he mentioned that Huawei had prepared a spare chip for ten years, all overnight

。 In the past few years, Huawei almost used TSMC's production line to do chip foundry, which is closely related to TSMC's development for many years and its advanced and stable technology. However, according to previous media information, Huawei used SMIC's 14nm process to produce Kirin 710A chip this year, which is a zero breakthrough for Huawei and also of great significance to SMIC.

To some extent, this is related to Huawei's rich experience in design and technology. Because for suppliers, if a customer with high quality requirements is willing to give opportunities to themselves, then the help brought is more obvious. In addition, we can see more intuitively the significance of Huawei to China's semiconductor industry from the Prospectuses of the two companies that hope to log on to the science and Technology Innovation Board recently.

First of all, we will look at srip, which is an integrated circuit design enterprise focusing on the R & D and sales of analog integrated circuit products. Since the establishment of the company, we have more than 900 high-quality analog products.

The company's products are mainly signal chain analog chip, and gradually expand to power management analog chip, its application scope covers information communication, industrial control, monitoring safety, medical health, instrumentation and household appliances and many other fields. This has helped them achieve good financial performance.

华为对中国半导体意味着什么?

However, from the above figure, we can see from the above figure that the revenue of seripu, which has relatively stable revenue in 2017 and 2018, has directly soared from more than 100 million yuan to more than 300 million yuan in 2019, and the profit has soared directly from loss to more than 60 million yuan, which is mainly related to its customer a.

华为对中国半导体意味着什么?

As shown in the above figure, the purchase amount of customer a in 2019 is slightly more than 170 million, accounting for 57.13% and% of the company's revenue in that year. According to relevant information disclosure, this customer a is Huawei. The same situation has also appeared in canqin technology, which recently disclosed the prospectus.

According to the data, canqin technology is mainly engaged in the R & D, production and sales of microwave dielectric ceramic components, including dielectric waveguide filter and TEM Dielectric filters, dielectric resonators, dielectric antennas and other components are mainly used for receiving, transmitting and processing RF signals. They are widely used in mobile communications, radar and radio frequency circuits, satellite communication navigation and positioning, aerospace and national defense science and engineering.

华为对中国半导体意味着什么?

As shown above, the company's revenue in the past three years has increased steadily. However, in 2019, there has also been an explosive growth. The revenue has directly soared from 270 million to 1.4 billion, and the profit has soared from 57 million to 700 million. This is mainly due to its customer H.

According to the prospectus, during the reporting period, the sales amount of the issuer to customer h and the enterprises under the same control were 2018.99 million yuan, 137.9702 million yuan and 128.64.307 million yuan respectively, accounting for 16.76%, 50.87% and 91.34% of the operating income respectively. Customer h and the enterprises under the same control of the issuer are the largest customers of the issuer. This customer h is also Huawei. In fact, the above are not isolated cases. In the domestic semiconductor field, many of the same stories are being staged.

Support from investment enterprises

In fact, before the U.S. embargo, Huawei was very low-key, and rarely made external investment, including investment. But after experiencing the survival test of the past two years, Huawei began to change its thinking. In addition to directly purchasing the products of existing domestic suppliers, Huawei also began to invest abroad to bet on the future.

In addition to financial considerations, these investments can also give some different guidance to the invested customers due to their huge terminal sales capacity. In April 2019, Huawei established a new subsidiary, Hubble investment, with a registered capital of 700 million yuan. According to relevant information, the business scope of Hubble investment is venture capital business.

According to the website at that time ,Huawei management said:

From the perspective of the types of enterprises invested by Hubble, according to the application level, most of these enterprises are involved in the automotive semiconductor field. Judging from the development of global automotive semiconductor market, according to the calculation of research institutions, the scale of automotive semiconductor market will continue to grow from $40 billion in 2019 and may reach $200 billion in 2040.

At the same time, we have also seen several mergers and acquisitions of more than 10 billion US dollars around the automotive semiconductor industry in the international market in recent years (for example, Infineon acquired cypress with us $10.1 billion in the middle of this year), all of which indicate the future of the automotive semiconductor industry. Huawei's layout is also a plan to seize the future automotive semiconductor market.

By investing in the development of these domestic automotive semiconductor enterprises, we can not only connect with Huawei's internal efforts in the automotive field, but also lay a good supply chain for its products. Therefore, it will also promote the development of relevant domestic industrial chains in the future.

On the other hand, according to the technical classification, there are also some enterprises involved in the third generation semiconductor materials. As we all know, the advent of 5g era has brought broad business opportunities for the third generation semiconductor materials. In the middle of this year, with the upsurge of Gan charger, the third generation semiconductor has been pushed to the focus of the market again.

At the same time ,Huawei attach great importance to the development of basic disciplines from the interview records of Ren Zhengfei, the head of the Huawei. And materials as semiconductors

One last thought

The contribution of Huawei's own chips and investment to China's semiconductor industry is obvious. However, for Huawei's suppliers, we have a little advice. That is, although Huawei's orders are huge and can achieve the development of some enterprises in a short time, due to the strong strength of Huawei's self-developed chips. That means that if these suppliers want to continue to benefit from Huawei's cooperation, they need to strengthen their technology layout and accumulation.

Taking the recently listed Cambrian as an example, according to the Cambrian disclosure, the company's IP licensing revenue mainly came from the terminal intelligent processor IP Cambrian 1a and Cambrian 1H according to the Cambrian disclosure. The IP licensing business revenue of terminal intelligent processor in 2019 decreased by 41.23% compared with that in 2018, which was mainly due to Huawei Hisilicon's selection of self-developed terminal intelligent chip and no further cooperation with the company.

As the company and Huawei Hisilicon have not continued to reach new cooperation, and it is difficult for the company to develop large customers with the same business volume in the short term, the company's terminal intelligent processor IP licensing business revenue will continue to decline in 2020. At the same time, Cambrian also said in the inquiry that during the reporting period, except for Huawei Hisilicon, the sales scale of other IP licensing business customers of the company was small; because Huawei Hisilicon chose to develop self-developed terminal intelligent chips, the number and amount of orders in hand of IP licensing business of the company is small.

From this, it is not difficult to see the B-side impact of Huawei on domestic suppliers. This requires domestic Huawei supply chain manufacturers to think about how to cooperate with Huawei, so that both sides can achieve a win-win situation and ensure their own healthy development.

And we have to stress that this is not unique to Huawei, because it's the self-made rule apple has been practicing for years. As we all know, Apple has been building up its own chips in recent years

To that end, two years earlier, Apple had wanted to abandon Imagination to build its own GPU team, and when Apple announced the news in April 2017, Imagination share price plunged nearly 69 percent in a flash. But three years later, apple reached a new multi-year licensing agreement with Imagination. This is mainly because of Imagination strength in GPU IP field, let Apple practice

In addition, Apple and Qualcomm also have a disproportionate amount

It is its own R & D strength that makes no other supplier in the market can replace their position, which makes the above two enterprises able to remain invincible in the market. For this reason, for domestic semiconductor enterprises, perhaps how to enter the market, get the favor of the market, and get the orders of big customers is the most important thing.

But after that, how to push domestic semiconductor enterprises into a broader market and gain a firm foothold in the industrial chain is also a matter worth thinking about.

But in any case, Huawei is definitely a banner worthy of protection for China's semiconductor industry.

华为对中国半导体意味着什么?

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