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, materials! Huawei, welcome another semiconductor IPO!
. Foxconn makes cores, tearing off the "OEM" label
. Rumor: Samsung's Xi'an chip factory may run out of materials and stop production!
. Will semiconductors experience negative growth in 2023?
. Japan will cooperate with the United States on 2nm manufacturing base!
, material! Huawei, welcome another semiconductor IPO!
Huawei welcomes another semiconductor IPO.
html On June 14, according to the core list news, Jiangsu Huahai Chengke’s Science and Technology Innovation Board IPO was accepted by the Shanghai Stock Exchange. Huahai Chengke focuses on the research, development and industrialization of semiconductor packaging materials.
Jiangsu Huahai Chengke New Materials Co., Ltd. (Huahai Chengke for short) was established in December 2010. It is a national-level specialized new "little giant" enterprise focusing on the research, development and industrialization of semiconductor packaging materials. The main products are epoxy plastic sealants and electronic adhesives.
Huahai Chengke has developed into a large-scale epoxy plastic packaging material manufacturer in my country with a complete product series and the ability to continuously innovate. It has built a complete R&D and production system in the field of semiconductor packaging materials and has completely independent intellectual property rights.
Behind the IPO of Huahai Chengke, Huawei Hubble, SMIC Juyuan and others suddenly took shares.
Huahai Chengke has raised 330 million yuan. The funds raised this time are planned to be invested in epoxy plastic sealing material projects for high-density integrated circuits and system-level module packaging, R&D center upgrade projects and supplementary working capital.
Behind the listing of Huahai Chengke is the story of a semiconductor entrepreneur who fought against all odds.
For a dream, for a company that can make domestic semiconductors stand upright in the international market, Han Jianglong resolutely quit his high-paying job in a Fortune 500 company and chose to fight for the dream of "making the best electronic materials in China." When hundreds of companies compete for the current, the one who advances first will win; when the current hits the water, the one who advances bravely will win. Focusing on the field of epoxy plastic sealing materials, China is also covered with "nice clothes".
▲Picture: Huahai Chengke
Han Jianglong: A desperate struggle for semiconductor entrepreneurs The first domestic plastic sealant
Lianyungang is close to the Yellow Sea and is rich in silica powder, which is the most important inorganic filler for epoxy plastic sealants. Therefore, Lianyungang has become the capital of epoxy plastic sealants in China and has the earliest production of epoxy plastic sealants in China. factory.
In 1987, after graduating from University, Han Jianglong was engaged in the research and development of epoxy plastic sealing materials. He has been deeply involved in this industry for 35 years.
He started as a front-line technician and has successively served as deputy technical section chief, workshop director, deputy general manager, general manager and chairman.
But he has always had an entrepreneurial dream in his heart: to make the best domestic electronic material products, break the monopoly of foreign products, and let domestic electronic materials have a say in the market.
In 2010, for this dream, he resigned from his high-paying job as general manager of Henkel Warwick. He led his former colleagues at Henkel Warwick to start a desperate battle.
From factory location planning to factory safety equipment, Han Jianglong has always been on the front line, dedicated, dedicated, good at thinking, diligent in learning, and has done every detail of his work to the extreme, striving to obtain better resources. Utilizing and configuring the most reasonable facilities and designing the best production lines, many of the equipment were researched, designed, and modified with the equipment manufacturers based on the premise of learning from domestic and foreign manufacturers and combined with our own twenty or thirty years of experience in electronic packaging materials. We have completed thirty A number of major equipment technical transformations have greatly improved production efficiency and ensured product quality.From the start of infrastructure construction to trial production of the production line, it was completed in less than one year, achieving the goal of starting construction in the same year and completing and putting into production in the same year.
Relying on the company's core technology system, the company has formed a comprehensive product layout covering traditional packaging fields and advanced packaging fields. In the field of traditional packaging, the company's products already have the advantages of stable quality, excellent performance, and high cost performance, and the performance of high-performance epoxy plastic sealing materials used in SOT and SOP fields has reached the level of foreign-funded manufacturers, and has been established in Changdian Technology , Huatian Technology and other mainstream manufacturers are gradually It has realized the substitution of products from foreign manufacturers and its market share has continued to grow; in the field of advanced packaging, the company has successfully developed packaging materials for QFN/BGA, FC, SiP, FOWLP/FOPLP and other packaging forms, and related products have successively passed The customer's assessment and verification fully reflects the advanced nature of the company's technical level.
With breakthroughs in technology research and development, improvement of product systems and expansion of market channels, the company's technical level, product quality and brand have been recognized by well-known downstream customers, and it has gradually developed into one of the leading domestic epoxy plastic sealing material manufacturers.
In terms of research and development model, the company is guided by the development trend of downstream packaging technology and customer customization needs, and continues to develop and optimize semiconductor packaging material formulas and production processes. During the research and development process, the company needs to screen out suitable raw materials and determine the production process parameters such as the proportion of various materials, the order of addition, mixing temperature, mixing time, mixing speed, etc., so as to determine the interaction between various physical and chemical performance indicators. To achieve a balance between the two to achieve good comprehensive performance; in terms of production model, the company implements sales-based production and demand The production model combined with forecasting can respond promptly to various requirements put forward by customers, and quickly adjust product types and output according to market demand; in terms of sales model, the company mainly adopts a direct sales model, which helps customers to sell products more efficiently. Obtaining products also helps to deeply understand customer needs and continue to provide competitive products.
▲Picture: Huahai Chengke Han Jianglong led the front-line operation staff of the workshop to visit and learn at the Chuzhou factory of Jiangsu Changdian
Epoxy plastic sealing material: the main consumables in the field of packaging and testing
Huahai Chengke, the advantage of domestic substitution is gradually emerging
Huahai Chengke's main products are epoxy plastic sealants and electronic adhesives, and epoxy plastic sealants account for 95%+ of revenue, so the product advantages are obvious.
Epoxy Molding Compound (referred to as EMC), the full name of epoxy resin molding compound , is a thermosetting chemical material used for semiconductor packaging. It is composed of epoxy resin as the matrix resin, high-performance phenolic resin as the curing agent, adding fillers such as silica powder, and adding Processed with a variety of additives, its main function is to protect semiconductor chips from the influence of the external environment (water vapor, temperature, pollution, etc.), and to achieve composite functions such as thermal conductivity, insulation, moisture resistance, pressure resistance, and support.
epoxy plastic sealing compound is used in the plastic sealing process of the semiconductor packaging process, which is an industrial link with high technical content, difficult process and knowledge-intensive process.
The company’s main products include epoxy plastic sealants and electronic adhesives, which are widely used in semiconductor packaging, board-level assembly and other application scenarios.Among them, epoxy plastic encapsulation materials and chip-level electronic adhesives are closely related to the development of semiconductor packaging technology. They are key materials to ensure the stable realization of chip functions and greatly affect the quality of semiconductor devices. The specific application scenarios are shown in the following figure:
, In the traditional packaging field , the company applies Products in DIP, TO, SOT, SOP and other package forms already have the advantages of stable quality, excellent performance, and high cost performance, and the product performance of high-performance epoxy plastic sealants used in SOT and SOP fields has reached the level of foreign manufacturers. And some mainstream manufacturers such as Changdian Technology and Huatian Technology have gradually replaced the products of foreign manufacturers, and their market share has continued to grow;
, and in the field of advanced packaging , the company has developed Packaging materials in the form of QFN, BGA, FC, SiP and FOWLP/FOPLP. Products used in QFN have been produced and sold in small batches. Granular epoxy molding compound (GMC) and FC underfill are used in advanced applications. The packaging materials have been verified by customers, and the liquid plastic sealing material (LMC) is in the process of customer verification. The above-mentioned products used in advanced packaging are expected to gradually achieve industrialization and break the monopoly of foreign manufacturers.
company and Changdian Technology (600584.SH), Tongfu Microelectronics (002156.SZ), Huatian Technology (002185.SZ), Fuman Micro (30067) 1.SZ), Qipai Technology (688216.SH), Yangjie Technology (300373.SZ), Jingdao Micro (A20316.SZ), Galaxy Microelectronics (688689.SH) and other well-known downstream manufacturers have established long-term good partnership and gained customers 2021 Partner of the Year Award from B.
Huahai Chengke: Product revenue share
Huahai Chengke: Main product capacity utilization rate and production and sales rate
Huahai Chengke: Changes in sales prices of main products
Customer group: Changdian, Huatian, Tongfu, etc.
During the reporting period, Huahai Chengke's sales to the top five customers were respectively 53.0424 million yuan, 74.0324 million yuan and 90.4013 million yuan, accounting for 30.80%, 29.88% and 26.05% of operating income respectively, showing a downward trend year by year. The dependence on a single customer is low, and there is no sales ratio to a single customer. If it exceeds 50% of the total amount, there is no customer concentration.
The company's products have high technical content, and their quality and performance indicators have a significant impact on the quality and stability of downstream packaging products. They are key materials for downstream customers, so there is a strict supplier certification mechanism. Once the company's products pass the certification of downstream customers, the two parties will usually establish a long-term and stable cooperative relationship.
The top five customers in each reporting period have all cooperated with the company for many years and have established a long-term and continuous cooperative relationship with the company, which is stable and sustainable. The above-mentioned major customers are all major global or domestic semiconductor packaging manufacturers, which reflects that the company has been widely recognized by the downstream industry and the company's products are competitive.
▲Picture: Xu Xiaotian, former vice chairman of China Semiconductor Industry Association, and his delegation visited Jiangsu Huahai Chengke booth to guide the work
Investors: Xinchao, Huatian, Hubble, SMIC Juyuan, etc.
signed a gambling agreement with Juyuan Xincheng
The actual controllers Han Jianglong, Tao Jun, and Cheng Xingming respectively directly hold the issuer 18.58%, 5.72%, and 5.34% of the shares, and signed the "Concert Acting Persons Agreement" in May 2019. De Yufeng directly holds 17.03% of the issuer's shares. Han Jianglong, Cheng Xingming, and Tao Jun hold 20.99%, 8.56%, and 7.56% of the capital contribution of De Yufeng respectively. Tao Jun is De Yufeng's executive partner. .
Nantong Huahong Investment Co., Ltd., a wholly-owned subsidiary of Nantong Huada, is a limited partner of Quande Xuerou Kexin and holds a subscribed capital contribution of 70 million yuan from Quande Xuerou Kexin (the corresponding capital contribution ratio is 22.73%), the company’s shareholder Huatian Technology holds 100% of Shengyu Huatian’s limited partner Xi’an Tianli Investment Partnership (limited partnership) through direct and indirect methods, and Qingyuan Zhiben holds 100% of the shares of Galaxy controlled by the company’s shareholder Yang Senmao 3.50% equity interest in Microelectronics (as of March 31, 2022 Japan), Shen Zhiliang is the uncle of the spouse of Han Jianglong, one of the actual controllers of the issuer, and Chen Jiayu is the son of the brother-in-law of Shi Mingda , the actual controller of Nantong Huada.
It is worth noting that behind Juyuan Xincheng are SMIC Juyuan, Shengyu Huatian and Huatian Technology, and behind Quande Xueluo Kexin are Tongfu, Liyang Chip, etc.
Among them, the shareholder Fang Juyuan Xincheng (backed by SMIC Juyuan, etc.) signed a gambling agreement when taking shares in November 2021. I wonder if it is fair to other shareholders? ?
Company development strategic plan
Huahai Chengke always adheres to the "integrity management, science and technology" "Technological innovation, lean manufacturing, quality excellence, and common development" are the core values of the enterprise. We adhere to the market-oriented, technology-supported, and honesty and trustworthiness fundamental principles, constantly improve our technical strength, adhere to scientific and technological innovation, and focus on scientific research results. Industrialization to continue to provide customers with competitive semiconductor packaging materials.
In the future, based on the competitive advantages of existing semiconductor packaging materials, the company will build a forward-looking and innovative technology system based on customer customized needs and the development trend of downstream packaging technology, and continue to optimize and improve product layout. In the field of packaging materials for traditional packaging, the company relies on its existing advantageous products to develop products in SOD, SOP Accelerate the substitution of products from foreign manufacturers in other fields, and actively plan around the new needs of existing customers and potential customers, thereby further expanding the company's business scale and increasing market share; in the field of advanced packaging materials, the company will use advanced packaging Based on the technical characteristics of the company, relying on the company's innovative and forward-looking technology and product layout in this field, it actively cooperates with major manufacturers in the industry to tackle technical and process difficulties, and gradually realizes the comprehensive industrialization of advanced packaging materials.
In summary, the company focuses on the research, development and industrialization of semiconductor packaging materials, and is committed to growing into an industry leader in China's semiconductor packaging materials and a strong global competitor, and continues to strive to build an outstanding global enterprise. Contribute to the development and growth of my country's semiconductor industry chain. (Core list)
, Foxconn makes cores, tearing off the "OEM" label
In 2007, a generation of iPhone was born. This product not only represented Apple opened a new era of smart phones, but also created Foxconn, an industry giant. .
In the following years, Foxconn, as Apple’s biggest beneficiary, saw its revenue increase with the upgrade of the iPhone. Foxconn, which is famous for assembling iPhones, has won the reputation of "King of OEM" and has also been shackles in the dark.
Acer Group founder Shi Zhenrong proposed the famous " smile curve " in 1992. The curve is an image of a smiling mouth. The left end of the mouth with both ends pointing upward represents design, and the right end represents sales. In the industrial chain, the added value at these two ends is high, while the assembly and manufacturing in the middle link has the lowest added value.
This is also Foxconn’s dilemma.
Foxconn, which has been labeled as the "King of OEMs", has gradually felt that the model of making money by relying on low gross profit and extreme cost compression has become increasingly weak in the following years.At the same time, with the success of Apple's balancing strategy and the rise of mainland OEM companies such as BYD and Luxshare Precision, Foxconn's profits are deteriorating day by day, and it may have had enough of being led by Apple.
For a long time, Foxconn, which has two sides in one body, has suffered from mixed reputations as a "sweatshop" and "the world's first-generation factory", as well as the "hidden pain" of low profit margins. After seeing Apple’s “true face” clearly, many Apple supply chain giants have launched diversified layouts.
In recent years, Foxconn has also been seeking to diversify its business beyond Apple products, but where is the path for Foxconn?
Looking at it now, Foxconn’s choice to enter the upstream semiconductor-related industries after many twists and turns is the magic weapon for Foxconn to bet on “escaping the sea of suffering”. Foxconn hopes to transform from a foundry giant into a company that produces independent products such as chip components and electronic products, and can provide manufacturing-related services.
reviews Foxconn’s core-making plan, which has been implemented for a long time and has been keeping pace with its parent company Hon Hai Precision Industry Co., Ltd. (hereinafter referred to as “Hon Hai ”) in the semiconductor industry. Through this article, let’s take a look at what layouts Foxconn and Hon Hai have made in the semiconductor industry over the years, and the underlying logic behind their layouts.
Foxconn’s “core” layout
M&A is a common tactic used by almost every latecomer or cross-border player. The same is true for
Foxconn.
In 2016, Sharp , then a "century-old brand" in the field of Japanese television, suffered losses for eight consecutive years due to poor management. Foxconn also had a hard time that year. Due to sluggish demand for Apple's iPhone 6s, Foxconn's revenue as an assembly plant was affected, falling 2.8% year-on-year.
Foxconn, which was eager for change, met Sharp, which was in trouble, and the two sides hit it off.
Foxconn hopes to use its TV brand effect and display panel technology to help the company enter the terminal brand and screen production business and reduce its dependence on the foundry business. However, due to the subsequent mispositioning of Sharp's brand effect and market strategy, Foxconn swallowed bitter pills one after another.
Today's Sharp has transformed from a technology leader in the TV industry to a disruptor in the red sea of TV price wars, willing to lower its own price. On the other hand, with the growth of domestic panel manufacturers such as BOE and CSOT With the rise of LCD, Sharp's advantage in the LCD field has basically ceased to exist. Samsung and LG also had to withdraw from the LCD field due to the strong competitiveness of domestic companies. Foxconn's original strategy of leveraging Sharp to enhance its brand in the LCD field has almost come to an end.
It’s hard for Sharp to turn back after drinking poison to quench its thirst. However, with part of its semiconductor-related business, it helped Foxconn start its layout in the semiconductor track, and Sharp became the first piece of the puzzle in Foxconn’s semiconductor territory.
It was after the acquisition of Sharp that Foxconn began to accelerate its layout in the semiconductor field.
In 2016, Foxconn announced its cooperation with ARM to set up a chip design center in Shenzhen and reached cooperation with the Shenzhen Municipal Government in the semiconductor field. This move also became one of the early milestones of Foxconn's entry into semiconductors.
’s acquisition of Sharp allowed Foxconn to experience the benefits of “borrowing” development. When the next acquisition opportunity arose, Foxconn did not hesitate to take action again. In 2017, Foxconn set its sights on another Japanese semiconductor giant, Toshiba , and planned to acquire Toshiba's flash memory business for US$27 billion. However, it was eventually stopped halfway by the US private equity firm Bain Capital .
Also in the same year, Foxconn launched an internal structural reform and established a semiconductor sub-group. Among them, the S sub-group corresponds to the semiconductor business, which is the future core of the company.
S subgroup includes semiconductor equipment factory Jingding, packaging and testing factories Xunxin and Futaikang, as well as IC design service company Hongjing, Sharp 8-inch factory Fab 4, and chip design including driver IC factory Tianyu and fingerprint touch IC factory. Junyao, storage products include Jingzhao Innovation and other related companies.
At the same time, in addition to trying to acquire industry manufacturers and adjust its own organizational structure, Foxconn is also actively deploying in various parts of the mainland.
After 2018, Foxconn publicly announced its entry into the semiconductor field. Since then, Foxconn has begun to cast its net in many places in mainland China, and has successively made investments in the semiconductor field in Zhuhai, Shandong, Nanjing, Qingdao and other places.
In June 2018, Shandong Province released a list of major provincial projects for converting old and new kinetic energy, and Foxconn Electronic Information Industrial Park was included on the list. The industrial park includes smart factories, chip research and development, Sharp 8-inch wafers, multiple imaging packaging, etc., with a total investment of 14.4 billion yuan.
In August 2018, Foxconn signed a strategic cooperation agreement with the Zhuhai Municipal Government. The two parties will cooperate in semiconductor design services, semiconductor equipment and chip design.
In November 2018, the Nanjing Semiconductor Industry Base and Semiconductor Equipment Manufacturing Project of Jingding Precision, a subsidiary of Foxconn, was officially signed with a total investment of 2 billion yuan and is expected to be completed and put into production before the end of 2019.
In March 2019, semiconductor equipment manufacturer Peixin Energy Technology Co., Ltd. , a subsidiary of Foxconn Group, broke ground on a new factory in Nanjing.
In April 2020, Foxconn signed a cooperation project with Qingdao West Coast New District to implement a high-end semiconductor packaging and testing project. In July 2021, Foxconn's first chip packaging and testing factory in Qingdao ushered in the first core equipment-a domestic SMEE packaging lithography machine; in November, the commissioning ceremony of this high-end packaging and testing project was held in Qingdao West Coast New District, accompanied by The first wafer-level packaging and testing production line was successfully launched, and the project officially entered the production and operation stage. It is expected to reach production in 2025. After reaching production, approximately 30,000 wafer chips will be packaged and tested per month.
In June 2020, Foxconn 5G millimeter wave connectors participated in the Kunshan City major project centralized signing ceremony. ...
From the perspective of industrial layout, in the upstream of semiconductors, Foxconn has the ability to replace some of the role of designers and can develop the specifications required for end products on its own; in the midstream , Foxconn can also accept orders designed by itself or other manufacturers, and produce related devices for end product applications based on its own semiconductor manufacturing technology; in the downstream part, after it obtains the completed devices, it can develop its own Advanced packaging technology, post-processing, and finally assembly and assembly of components.
Source: Financial News
At present, in addition to controlling Macronix’s 6-inch factory and Sharp’s 8-inch factory, Hon Hai has semiconductor-related plans in Malaysia , India, and mainland China.
Hon Hai acquired approximately 5.03% of DNeX’s equity in 2021, and DNeX holds approximately 60% of the equity of SilTerra, a Malaysian wafer fab. This move means that Hon Hai has indirectly invested in the Malaysian 8-inch wafer fab. The Malaysian plant has a monthly production capacity target of 40,000 pieces, which is second only to the 55,000 pieces of TSMC's Kumamoto plant. It is larger than the expansion of UMC in Singapore, highlighting Hon Hai Group's ambition in the semiconductor field.
In the future, Hon Hai will cooperate in depth with SilTerra in the fields of semiconductors, electric vehicles, , etc., which is in line with one of Hon Hai’s “3+3” field investment plans. Next, Hon Hai will use the power of the Malaysian government and DNeX Group to further enter the field of 12-inch wafer fabs.
At this point, a new semiconductor empire has been looming.
Hon Hai’s territory in the semiconductor industry is pieced together piece by piece. From the upstream driver IC factory Tianyu, to the manufacturing end, we have purchased the 6-inch factory from Macronix, invested in Sharp's 8-inch factory, and SilTerra The 8-inch factory went downstream to the packaging and testing base in Qingdao, and invested in the packaging and testing factory Xunxin-KY. In terms of equipment, there are companies such as Jingding Precision and Fanxuan. Now it will jointly build a 12-inch factory with DNex in Malaysia , to supplement the 12-inch wafer manufacturing puzzle that Foxconn Group originally lacked in the semiconductor business.
In addition, Hon Hai has also recently successfully recruited Peng Shugen, R&D director of Shanghai Huali Microelectronics, a subsidiary of Huahong Group, to serve as SilTerra CEO. He has rich industry experience and has worked in TSMC, SMIC, Singapore Chartered Semiconductor, Shanghai Grace Semiconductor and other companies. With this general at the helm, the market will have high expectations for Hon Hai's future performance in the semiconductor field.
In the past few years, Foxconn has been very busy with various attacks, but behind the excitement, we think about the reasons why Foxconn entered the semiconductor field. There are many interpretations in the industry: Some people say it is because Foxconn wants to change the status quo of being overly dependent on Apple in its business. Others say it is because the growth of Foxconn’s former “little brother” Luxshare Precision has made Foxconn feel that the foundry business is in danger of being “taken away”.
According to Foxconn’s former chairman Terry Gou, the “core” plan is to meet Foxconn’s own chip usage needs and reduce costs. In other words, if the chips can be "self-produced and sold", Foxconn can save a lot of money.
In addition, this also paved the way for Foxconn to enter the electric vehicle market.
Foxconn, tear off the "OEM" label
The OEM business is facing over-reliance on Apple, Luxshare Precision, etc. to compete for customers, making it difficult for Foxconn to feel at ease.
At the same time, as the market growth rate of consumer electronic terminals represented by smartphones and TVs has peaked, there is an urgent need to expand into the next major track. As the next huge smart terminal market, electric vehicles have become the reason why Foxconn, which has many layouts in the semiconductor field, decided to enter the market.
Since 2021, Foxconn has continued to make efforts.
In August 2021, Hon Hai and Macronix purchased Macronix’s 6-inch wafer plant and equipment in the Hsinchu Science Park in Taiwan for NT$32.52 billion. Hon Hai will be used to develop and produce third-generation semiconductors, especially SiC power components used in electric vehicles, including 1700V, 1200V, and 650V medium and high-voltage power modules, which will be used in car chargers , charging piles and DC transformers.
This transaction may seem small in scale, but it can help Foxconn develop rapidly in the field of automotive semiconductors. Foxconn said the acquisition will help ensure a stable supply of automotive chips as the company further expands into the electric vehicle industry.
At this point, Foxconn, which has frequently been involved in the electric vehicle industry in recent years, has officially entered the field of electric vehicle chips, deepening its chip business amid unprecedented tightness in global chip supply.
In December 2021, Hon Hai announced that it would jointly develop and design automotive semiconductor chips with Stellantis, aiming to significantly simplify the supply chain and significantly optimize components to meet more than 80% of the needs of both parties in automotive semiconductors.
In March 2022, Foxconn is planning to negotiate with Saudi Arabia to jointly build a US$9 billion factory, mainly producing chips, electric vehicle components, displays and other products. It is reported that Hon Hai proposed to establish a two-line semiconductor foundry for wafer manufacturing and packaging testing in NEOM, a desert technology city in Saudi Arabia.
Hon Hai will focus on the global diversified production capacity and technology layout this year, extending the group's EV to vertically integrate into semiconductors, benchmarking MCU, SoC, automotive small ICs, etc. required for the future EV EEA architecture, and will soon expand production capacity and supply Deeper cooperation with the chain and joint development of chips with important customers will be a very important niche for Hon Hai.
At the same time, Hon Hai will also focus on mature processes in the semiconductor industry and add special processes to make the company more competitive in electric vehicle chips. Investment directions include: transforming the 6-inch factory into a SiC manufacturing plant and achieving a voltage-resistant process of 800V and 1200V.
Foxconn emphasized that semiconductors are an important link in the vertical integration of the electric vehicle industry, and hopes to build a complete SiC ecosystem from top to bottom through cooperation and its own production capacity.
In addition, Foxconn has carried out OEM business with many well-known car companies such as Byton and Fisker , and has established a joint venture with Geely Holding to provide them with automobile OEM production and customized consulting services. It even hired former NIO executive vice president Zheng Xiancong to serve as CEO of Foxconn's electric vehicle platform.
In terms of systems, Foxconn has launched the MIH platform, which is called the "Android system in the electric vehicle industry" by the industry. This platform is based on the software framework on the hardware platform, connected to the Internet of Vehicles to create a complete EV open platform, which can provide all on-board services, thereby supporting the entire architecture, just like the Android system of mobile phones, providing applications Developers provide frameworks, and even car manufacturers can integrate their own autonomous driving systems . At present, there are more than 2,000 members of the MIH platform, distributed in nearly 50 countries and regions around the world.
Source: Pacific Automotive
In order to quickly achieve fruition in the field of electric vehicles, Foxconn has adopted the " multi-threaded " business model in recent years. Under the model of the entire industry chain, the focus is on batteries, motors and electrical systems. In the three most important areas, joint venture partners in car manufacturing have spread across Asia, Europe and the United States.
In North America, Foxconn purchased the land, factories, teams and production equipment of the American electric car manufacturer Lordstown Motors in Ohio for US$230 million. This move means that Foxconn officially owns its first car factory. Especially in North America, Foxconn will have its own electric vehicle manufacturing and R&D hub. In West Asia and the Arab region, Foxconn's joint venture plans are also progressing steadily.
Foxconn has previously promised to establish an open platform to provide key components of electric vehicles, including batteries and Internet of Vehicles services, to car companies to achieve the goal of supplying accessories or providing services to 10% of the world's electric vehicles by 2027. .
Foxconn will launch its first solid-state battery for electric vehicles in 2024, according to Hon Hai Chairman Liu Yangwei. This is a large-capacity storage device that can improve existing batteries and is considered by the outside world to be the best solution to solve the shortcomings of electric vehicles.
At the recent shareholder meeting, Liu Yangwei talked about new goals in electric vehicles, semiconductors and next-generation network communications in the next three years, emphasizing that the mid- to long-term gross profit margin target of 10% remains unchanged.
In terms of internal production of key automotive chips, Liu Yangwei revealed that silicon carbide used in car chargers will begin mass production in 2023, and automotive micro-control units will be put into production in 2024. is used for optical phased array lidar and The silicon carbide power module of inverter will begin mass production in 2024.
In addition, Foxconn also plans to invest in the development of a full range of medium and high-voltage power components to achieve large-scale mass production of automotive power management chips in 2024. Hon Hai’s layout of automotive small ICs is accelerating through alliances, joint ventures, and equity investments.In August last year, Hon Hai established a joint venture with Yageo, Guochuang Semiconductor, to complete its product lineup of low, medium and high voltage MOSFETs.
In the past few years, Hon Hai has completed its layout from 0 to 1 in the field of electric vehicles. has built a platform with a wide radiating area. Now, it has continuously launched a number of electric models and won car manufacturing plants. Since then, Hon Hai’s car-making process has entered a stage of rapid advancement.
Regarding the automotive business, Liu Yangwei has previously announced multiple plans: "By 2025, electric vehicles based on the MIH platform will seize 10% of the global market share; by 2026, electric vehicles will Car-related business contributes NT$1 trillion in revenue every year.”
html At the Hon Hai shareholders’ meeting just held on May 31, Liu Yangwei updated the target: Hon Hai’s electric vehicle layout target is expected to reach 5% of the market share in 2025.
Looking back at Foxconn’s layout in the automotive field, from chassis, batteries, motors to chips, Internet of Vehicles and other business sectors, Foxconn either conducted self-research or acquired cooperation, spent real money, and pieced together its own cars bit by bit. territory.
In 2015, Tesla CEO Elon Musk expressed this view in an interview: "Compared to a mobile phone or smart watch , a car is very complex . You can’t go to a supplier like Foxconn and say, ‘Build me a car.’”
A few years have passed, and the situation has changed. In the current global chip shortage environment, Hon Hai is determined to become the No. 1 supplier. An electric car manufacturer with “no shortage of materials.”
Although the industry has mixed reviews for Foxconn’s car manufacturing model. But the market is also looking forward to how much energy Foxconn, which plays an important role in the mobile phone field, can exert in the electric vehicle market.
Looking at the migration of China's electronics manufacturing industry from Foxconn
In the past thirty years, Foxconn has achieved unprecedented success by relying on processing and assembly in the growth of consumer electronics. It has ranked among the top 500 companies in the world with orders from first-class customers such as Apple, Amazon , and Huawei.
However, with the rise of the tertiary industry, factory workers are quickly moving to subdivided industries such as express delivery, takeout, and live broadcasting with low thresholds and higher profits. Labor costs are rising, and the demographic dividend of China's manufacturing is gradually disappearing. It once relied on low-tech OEMs Foxconn, which maintains performance growth, is showing signs of weakness.
Today, the international situation is complex. Whether it is the Sino-US trade war or the recently proposed "Indo-Pacific Economic Framework", they are all intended to curb the rise of China's high-tech industry. In addition, the epidemic has had a serious impact on the global electronics industry in the past two years. Under the situation, global supply chain companies are weighing the pros and cons and accelerating regional layout.
Among them, Apple’s supply chain manufacturers have taken the most active actions. In general, while Apple relies on China as the "world's factory", it also feels a great threat to China's power. Apple's demand for diversifying supply chain risks is increasing.
In order to follow the footsteps of Apple, Foxconn, Pegatron, Wistron, etc. have begun to invest and build factories in Southeast Asia such as India and Vietnam to prepare for future production line transfers.
There are a series of complex causes behind the migration of the electronics industry. "Finance Eleven" roughly summarizes this into three points:
First, the natural industrial transformation and upgrading, with lower value-added links flowing to labor Efforts are made to reach countries with lower land prices;
The second is the changes in tariff policies of various countries, and companies are switching production locations for the sake of economic benefits, driving the upstream migration of the industrial chain;
The third is the impact of external environments such as politics and epidemics in recent years. Foreign investment Companies face greater challenges in China and some have withdrawn from China.
Take Foxconn as an example.In February 2022, Hon Hai signed a cooperation memorandum with Vedanta, a large Indian multinational group, and planned to jointly fund and establish a joint venture to manufacture semiconductors in India.
Foxconn’s establishment of a joint venture chip factory in India is, on the one hand, in response to the Indian government’s call to increase India’s chip localization rate; on the other hand, it is also implementing Foxconn’s “India Strategy”, using India’s cheap labor force to Save operating costs. On the other hand, it will tap into India’s terminal foundry business other than chip manufacturing by establishing joint venture factories.
Outside of India, the Vietnam factory has become Foxconn’s largest factory outside of China, with more than 60,000 employees.
Hon Hai invested US$270 million in Vietnam in November 2020 to establish Fukang Technology to assemble Apple MacBook and iPad products. In September 2021, another US$80 million was added to the capital. Supply chain sources revealed that Hon Hai’s investment in Vietnam will be mainly responsible for wearable devices, tablets, laptops, smart speakers, etc. In the future, it will not rule out the production of Apple Watch-related wearable products.
Hon Hai Chairman Liu Yangwei further emphasized that the construction of the Vietnam factory will continue to advance, and it is expected that there will be substantial manpower expansion in the next two years.
In addition, there are reports that Foxconn plans to transfer part of the production of iPad and MacBook to a new factory in Vietnam. The factory was originally scheduled to start production in 2021, and the Vietnamese government also said at the time that Foxconn might invest $700 million there. However, it is unclear whether the plant has been built or operational.
It is reported that the current production line capacity established by Apple and suppliers in Vietnam still has a huge gap compared with China's production capacity. No matter in terms of scale or technology, it cannot currently be compared with China. The epidemic and international trade relations have provided opportunities and accelerated the exposure of shortcomings.
It is not difficult to understand that the current industrial level and product added value in India and Vietnam are low, industrial upgrading is difficult, and they do not have the ability to supply complex Apple product components. In the short term, it is difficult to replace China and become the world's factory. But this does not mean that China’s technology manufacturing industry chain can sit back and relax.
Looking at the economic development of Southeast Asia in the past thirty years, the development idea of "learning-copying-rising" continues, especially based on the "Chinese experience", Vietnam and India bucked the trend and rose after the "reform and opening up", and foreign trade prospered. , domestic demand has been boosted and asset prices have risen, clearly demonstrating the potential of Southeast Asia's new economic star.
The completion of any factory will lead to the rise of a number of supporting enterprises in the local area. These supporting enterprises can not only provide a large number of employment opportunities, but also effectively improve the technical level and ecological construction of the local manufacturing industry.
Both Vietnam and India have the opportunity to rise in this transfer trend of electronic manufacturing production lines, provided that they can copy China’s successful experience at a faster speed, integrate more fully into the regional and global economy, and make full use of its China has some advantages that it does not possess and has embarked on a "characteristic road to a strong manufacturing country."
written at the end
For a long time, "King of OEM" has been the label attached to Foxconn. But in order to survive and strive for greater profit margins, Foxconn is determined to use semiconductors to write its own new chapter.
At present, its intention to enter the semiconductor industry is already obvious, and its "large and comprehensive" chip business territory is gradually emerging. Whether it is establishing a semiconductor business group or investing money one after another, Foxconn has worked extra hard to build its own semiconductor territory. However, semiconductors are not the ultimate goal. This way, Foxconn can get rid of the "OEM" label and even get rid of its obsession with Apple. Absolute dependence, transformation and upgrading to the electric vehicle track is Foxconn’s goal.
If we understand it from a larger perspective, Foxconn’s series of layouts and actions all represent that China’s fruit chain suppliers are beginning to try to transform, gradually reducing their dependence on Apple orders, and pursuing industrial upgrading and transformation. ; It is also a reminder that under the current international situation, the migration of China's manufacturing industry to Southeast Asia is not a worry in the near future, but it requires long-term thinking and preparation for a rainy day. (Semiconductor Industry Observation)
. Rumor: Samsung’s Xi’an chip factory may run out of materials and cease production!
html News on June 14, according to Korean media reports, salary negotiations between the Korean Truck Drivers Union and the government broke down, causing a large-scale strike and causing serious disorder in the supply chain. Samsung Electronics' chip factory in Xi'an, China, has also been affected. Chip production capacity has been disrupted, which may lead to material shortages and production shutdowns!
According to reports, the Korea International Trade Association (KITA) stated on June 14 that a collective strike by South Korean truck drivers has caused Samsung Electronics’ chip production line in China to face a shutdown because a South Korean isopropyl alcohol (IPA) supplier is unable to export. The goods arrive in China, which in turn prevents Chinese wafer suppliers from supplying Samsung Electronics.
KITA pointed out that the company’s isopropyl alcohol stuck in South Korea and unable to export is approximately 90 tons, equivalent to one week’s shipments. Isopropyl alcohol is used to clean wafers during semiconductor manufacturing.
According to media reports, the trigger for the South Korean drivers' strike was that at a time when fuel prices were rising sharply, truck drivers hoped that the government would protect drivers' incomes and not abolish the current minimum wage regulations for drivers.
However, currently, the strike in South Korea shows no signs of easing. The Korean Truck Drivers Union has previously conducted four rounds of negotiations with the South Korean government, but no compromise was reached. On Tuesday, the Korean Truck Drivers Union said in a statement that it would continue the general strike and accused the Ministry of Transport of being "neither willing to negotiate nor capable of resolving the current situation."
It is said that production losses and delivery delays caused by South Korean truck drivers' strike have caused more than 1.2 billion US dollars in losses to South Korea's industrial sector.
Samsung Electronics did not immediately respond to the news. The company has two advanced NAND flash memory production lines in Xi'an. According to reports, the Xi'an plant accounts for approximately 43% of Samsung's total NAND flash memory production capacity and 15% of its global overall production capacity. (Chip List)
. Will semiconductors experience negative growth in 2023?
WSTS (World Semiconductor Market Statistics) released the spring 2022 semiconductor market forecast on June 7, 2022. The
report shows that the global semiconductor market size is expected to grow by 16.3% year-on-year in 2022, and is expected to continue positive growth in 2023, with a year-on-year growth of 5.1%.
The time will be until November 2021. At that time, WSTS predicted that the semiconductor market would grow by 8.8% year-on-year in 2022. This upward adjustment. Judging from the current situation, everyone has no objection to this revision, but how to evaluate 2023 compared with 2022? What about the 5.1% growth forecast?
Here, I would like to express my personal views on the market prospects in the second half of 2022 and after 2023.
Semiconductor product market size trends and forecasts (the upper row is the amount, the lower row is the year-on-year growth rate) [Click to enlarge] Source: WSTS/2022 Spring Semiconductor Market Forecast
From the perspective of the market size of semiconductor products, it is predicted that discrete devices will be An increase of 10.2% over 2021. Looking at the results from January to April 2022, this seems like a reasonable forecast, with year-on-year growth of 9.8%. However, it continued to grow by more than 10% until March 2022, and fell by 5.5% in April, its first negative growth since June 2008.
html Both small-signal systems and power transistors experienced negative growth in 24 months. It is speculated that this is mainly affected by the blockade policies adopted by Shanghai and other places in China. If so, the same situation will continue in May. The lockdown was lifted in June, but given the logistical turmoil and future macroeconomic trends, WSTS's forecast is likely to be "if that comes to fruition".There is nothing particularly unpalatable about the forecast for 3.8% growth in 2023 from 2022, and it seems unlikely that high growth will be expected as before.
However, in the medium to long term, demand for power transistors centered on automotive electrification is expected to increase, so we anticipate trends beyond 2024.
Optical semiconductors are expected to grow by 0.3% from 2021 onwards. Looking at the results from January 2022 to April 2022, there was a year-on-year decrease of 2.9%. About half of this market is occupied by image sensors, and actual performance as of April fell 13.2% year-on-year to double-digit negative growth. Given current trends, negative growth is likely in 2022.
The forecast for 2023 is 3.7% higher than 2022, but the outlook will change significantly based on the number of image sensors installed in each smartphone, so it will be necessary to pay close attention to this trend.
Sensors are expected to grow by 15.7% compared to 2021. Judging from the results from January 2022 to April 2022, the WSTS forecast seems somewhat conservative, with a steady year-on-year growth of 19.1%. The same goes for the forecast for 2023, which is 3.6% higher than 2022. The author expects this market to achieve double-digit growth for the time being. Analog, Micro and Logic are expected to grow aggressively, but...
ICs are segmented into Analog, Micro, Logic and Memory.
IC market size trends and forecasts (the upper row is the amount, the lower row is the year-on-year growth rate)
Compared with 2021, the analog market is expected to grow by 19.2%. Judging from the performance from January to April 2022, it increased by 24.9% year-on-year, maintaining a high growth rate, but the performance in April was lower than the performance from January to March. After all, the effects of China's lockdown appear to be playing out, and given these concerns, there's no discomfort in WSTS's forecast. It is expected to grow by 5.7% in 2023 compared with 2022, but the growth rate cannot be that low. There are various concerns, but I think we can expect about 10% year-over-year growth.
The microprocessor market is expected to grow by 11.4% compared to 2021. Judging from the performance from January 2022 to April 2022, the performance increased by 13.7% year-on-year, but the performance in April remained at a low growth of 0.3%. In particular, MPUs fell sharply by 9.4% in April, seemingly due to reduced PC production due to lockdowns.
MCU, on the other hand, was hardly affected by the lockdown and performed well in April, growing by 29.2%. Given our modest expectations for the future of the PC market, WSTS' forecasts appear to be at a reasonable level for the overall microcomputer market. The 2023 forecast is 5.3% higher than 2022, but the authors project growth closer to 10% as a lower bound. The
logic market is expected to grow 20.8% from 2021, the highest among all product areas. Judging from the performance from January to April 2022, it increased by 29.6% year-on-year and maintained a high growth rate. The performance in April also increased by 27.3% year-on-year. The impact of the blockade was not particularly obvious.
The author believes that taking the WSTS forecast as the lower limit, a growth of about 25% is expected, even if 2021 does not reach the 30.8% growth rate of the previous year. Growth in 2023 is expected to be 7.3% over 2022, but the growth rate is unlikely to be as low as in the simulated market. After all, I think we can expect around 10% growth.
Memory may be oversupplied
The memory market is expected to grow by 18.7% compared to 2021. Judging from the performance from January 2022 to April 2022, the performance increased by 21.3% year-on-year, but the performance in April increased by 7.3% year-on-year. In terms of regions, the American market performed well, with a year-on-year growth of 37.7%, while the Chinese market fell by 13.5% year-on-year, falling to negative growth. The American memory market is centered on data centers, and demand seems to be still strong, but the Chinese memory market, centered on PCs and smartphones, is sluggish.
There is no doubt that this is the impact of the lockdown, but what is the demand for PC and smartphone products, and can the market recover once production starts in China? It can be expected that China's memory market will recover to a certain extent after the lockdown is lifted. However, there is currently no shortage in the memory market, and there is a high possibility of oversupply in the future.
WSTS Not too uncomfortable with the 2022 forecast, but the positive 2023 growth forecast of 3.4% above 2022 may be too optimistic. The author predicts that negative growth in the memory market will be inevitable in 2023. Will
turn negative growth in 2023?
The overall conclusion is that the global semiconductor market is expected to grow by about 15% to 20% in 2022 compared with 2021, but the memory market may fall to double-digit negative growth in 2023, and other markets may also experience negative growth. Due to the slowdown in growth, the growth rate is expected to be negative since 2019. And now, we should think that we are approaching the so-called turning point, that is, the tide is changing in the semiconductor market.
Semiconductor front-end equipment (SPE), DRAM, and NAND flash memory market year-on-year growth rate (3-month moving average) Source: Grossberg Created by SEMI, WSTS and other materials
The picture above shows the world’s semiconductor front-end manufacturing equipment (SPE), DRAM , NAND flash memory market year-on-year growth rate (3-month moving average) chart. From this, it is clear that there is a strong correlation between trends in the SPE market and the memory market.
The author has been observing this highly relevant cycle for many years and expected the memory market to recover strongly in 2020. However, the COVID-19 epidemic disrupted life and economic activities around the world, and the demand for electronic equipment was also adversely affected. In the first half of 2020, Demand for PCs and game consoles was strong due to nested demand, but demand for smartphones and cars was sluggish, with car demand picking up sharply in the second half of the same year. There was turmoil. Therefore, the memory market has seen some recovery, but it is not as exciting as expected and will gradually peak from around the end of 2021.
To complement the trends thus far, the “semiconductor shortage” has attracted widespread attention since the beginning of 2021. All semiconductors, including microcomputers, analog, discretes and advanced logic, are in short supply, but memory is not. The unit prices of both DRAM and NAND flash memory increased during the previous peak, confirming that it was in shortage, but since 2021, both unit prices have been stable, "either excessive or insufficient. There is no such thing."
As for For other semiconductors, the shortage problem has not yet been solved, but foundry companies have begun to comment that "order volume has peaked" and "order cancellations have begun to appear"... However, due to the current large backlog of accumulated orders, each company's wafer fabs are almost operating at 100% capacity, and it seems that they do not intend to accept price cuts for the time being. However, issues that could have a negative impact on the global economy, such as the ongoing crisis in Ukraine and the blockade in China, should have a negative impact on the electronic equipment market. It will inevitably affect the demand for semiconductors, which should be seen from the comments of foundry companies. Isn’t it a matter of time before the semiconductor shortage is solved?
In summary, the author believes that it is necessary to maintain the previous statement that "the market trend may change in mid-2022" and prepare for negative growth in 2023. Wishful thinking, I just hope that the companies that outsource production to Foundry can avoid sudden braking, such as canceling all of a sudden. Semiconductor shortages have become a social problem for a year and a half. The sense of shortage has increased temporary demand, leading to higher-than-expected price increases. I hope everyone will discuss it from an industry perspective. (Semiconductor Industry Observation)
. Japan will cooperate with the United States on 2nm manufacturing base!
On June 15, according to Nihon Keizai Shimbun, Japan will cooperate with the United States to establish a 2nm semiconductor manufacturing base in Japan as early as 2025.
It is reported that Japan and the United States will provide support under a bilateral chip technology partnership.Private companies from both countries will conduct research on design and mass production.
reports pointed out that Japanese and American companies may establish joint ventures, or Japanese companies may establish new manufacturing centers. Japan’s Ministry of Economy, Trade and Industry will subsidize part of R&D expenses and capital expenditures. Joint research will start as early as this summer, with a research and mass production center established between 2025-2027. (China Semiconductor Forum)
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