Let me start with a clear explanation of why I wrote this "Industry Viewing" series.

??Strengthening the city through industry has been the development concept of Wuxi since the “Thirteenth Five-Year Plan”. How fast has the industry, especially the high-tech industry, developed in these critical five years? What "two brushes" does Wuxi have that are good at home and even internationally?

??I believe everyone will understand it from different perspectives, but it may not be clear and accurate.

??Municipal Party Committee Secretary Huang Qin proposed at the Municipal Party Committee Plenary Session at the end of last year to "enhance the confidence to win as a 'vanguard'", which listed a number of advanced manufacturing industry clusters worth hundreds of billions, such as integrated circuits, the Internet of Things, aero engines and gas turbines, etc., which are quite "incredible" in the country!

??The author just wants to present the latest and first-hand information to readers through interviews, and sort out some representative industries.

??▲The picture shows the schematic diagram of the Taihu Bay Science and Technology Innovation Zone, which embodies the hope of Wuxi becoming an industrially strong city and leaping to a new energy level.

??In-depth analysis is a must-see! If you can't finish reading at once, you can poke the three dots in the upper right corner, and then poke the two dots in the second row of "floating windows". Even if you return to the main WeChat interface, you can click the two dots in the upper left corner to continue reading at any time.

Strength determines status in the world

??Let’s get to the point. Let’s first talk about Wuxi’s integrated circuit industry.

??I wonder if you readers have noticed such a set of data——

??Municipal Party Committee Secretary Huang Qin mentioned at the Municipal Party Committee Plenary Session held at the end of 2020“The scale of the integrated circuit industry is second in the country”, Mayor Du Xiaogang mentioned in the 2021 Wuxi Two Sessions Government Work Report"The output value of the integrated circuit industry has increased to 135 billion yuan, ranking among the top in the country."

??The release of data has always been low-key, but experts know that these two statements carry a lot of weight!

??What is the concept of 135 billion yuan? What is its position in the country?

??According to preliminary estimates from the China Semiconductor Industry Association, despite the impact of the epidemic in the first half of this year, my country's integrated circuit industry still maintained rapid growth. The annual output value is expected to reach 876.6 billion yuan, a year-on-year increase of 15.92%.

??In 2018, Wuxi became the second city in the country after Shanghai with an integrated circuit output value of 100 billion. In 2020, it increased by 26% compared with 2019.

??If numbers are still too abstract, let’s look at specific “shapes”. First, we need to popularize the three components of the integrated circuit industry chain. Don't talk nonsense, just look at the pictures.

▲Schematic diagram of the integrated circuit industry chain

??In the words of Huang Anjun, secretary-general of the Wuxi Semiconductor Industry Association and vice president of Huahong Semiconductor (Wuxi) Co., Ltd.:At present, there are only two cities in China that have a relatively complete integrated circuit industry chain, one is Shanghai and the other is our Wuxi.

??Wuxi’s industrial scale rankings in the three major links of the industrial chain are as follows——

??Design - fourth in the country (preceded by Shenzhen, Shanghai and Beijing);

??Manufacturing - third in the country (first in Xi'an, second in Shanghai);

??Packaging and testing—No. 1 in the country (including Changdian Technology ranking third in the world).

▲The picture shows the statistics of Wuxi Semiconductor Industry Association

??Being sought after by the capital market is also a good indication of industrial strength. Zhuosheng Micro (the king of technology stocks), China Resources Micro (the first red chip stock), Xinpeng Micro (power management), Xinjieneng (power devices), etc. have been listed one after another. There are also a number of powerful companies such as Lixin Micro, Hongguang Microelectronics, Zhonggan Micro and Silicon Power, which are planning to go public, forming the "Wuxi phenomenon" of listed semiconductor companies.

??Zhuosheng Micro, which is well-known among investors, is a chip design company that went public in June 2019. After its listing, it ushered in the bottom rebound of the semiconductor industry cycle and ushered in the first year of 5G infrastructure in 2020. After its listing, its stock price increased by nearly 1,600% in 6 months, creating a miracle in the Chinese stock market.

▲The picture shows the competitiveness data compiled by “Core Thinking Research Institute”

??Wuxi Semiconductor Industry Association compared five data of Wuxi integrated circuit industry in 2017 and 2020 and it can be seen that——

??(1) The number of major projects exceeding 10 billion has increased from 1 to 4;

??(2) The number of regulated enterprises increased from 107 to 139;

??(3) The number of listed companies increased from 3 to 8;

??(4) The number of employees increases from 50,000 to 85,000;

??(5) The output value increased from 89 billion to 135 billion (ranking second in the country).

??There must be profound reasons behind the rapid development of Wuxi's integrated circuit industry in the "Thirteenth Five-Year Plan".

??Since the "Thirteenth Five-Year Plan", the Wuxi Municipal Party Committee and Government have vigorously implemented the innovation-driven core strategy and the industry-strengthening city-led strategy, proposed to revitalize the semiconductor industry, and introduced a series of relevant encouragement and support policies -

??◎ 2018, "Policy Opinions on Further Supporting the Development of the Integrated Circuit Industry";

??◎ 2019, "Opinions on Further Deepening Modern Industrial Development Policies";

??◎ 2020, "Wuxi 5G Industry Development Plan (2020-2025)".

??The current implementation results are outstanding. During this period, major projects exceeding 10 billion including Huahong Wuxi, Hynix Phase II, Yixing Central and Haichen Semiconductor started construction one after another.

??In September 2019, the 12-inch production line of Huahong Wuxi Project (Phase I) was completed and put into production ahead of schedule. This project is one of the major industrial projects in Wuxi City’s “13th Five-Year Plan” and is also the largest single investment industrial project in Wuxi’s history.

??In April 2019, Hynix Phase II was completed and put into production ahead of schedule, becoming the world's most technologically advanced 10-nanometer DRAM product production base.

??In September 2019, Yixing Zhonghuan’s leading 8-inch silicon wafer production workshop realized trial production ahead of schedule, filling my country’s gap in the field of silicon wafers for large-size integrated circuits.

??Haichen Semiconductor was officially completed and put into production on December 12, 2020. The total production capacity will reach 115,000 pieces/month, which is much higher than the average monthly production level of other 8-inch lines at home and abroad (50,000 pieces/month).

▲The picture shows a view of Huahong Wuxi exhibition space

??In addition to having policies in place, Wuxi’s profound foundation in the integrated circuit industry is also a major advantage.

??Wuxi is the region where my country's integrated circuit industry started earliest, and the country's first very large-scale integrated circuit was born here.

??Wuxi's integrated circuit industry foundation, talent reserve and awareness concept mainly benefit from the national microelectronics "908" project implemented in Wuxi during the "Eighth Five-Year Plan" period. Huajing Company has trained a group of the earliest integrated circuit industry talents in China.

??It is understood that there are still a large number of "Huajing people" who continue to struggle in important positions in the integrated circuit industry at home and abroad, and are hailed by the industry as the "Whampoa Military Academy" for Chinese integrated circuit talents.

??Another important factor cannot but be mentioned:The integrated circuit industry is known as the "top industry", which vividly illustrates the key role of the top leader's vision, courage and responsibility in the development of the industry.

??In different historical stages of development, Wuxi’s changes in leadership level and title (from the leader of the Wuxi IC Industry Leading Group to the Wuxi IC Industry Chain Leader), which focuses on the integrated circuit industry, reflect the different meanings and also reveal the internal reasons for the rapid development of Wuxi’s integrated circuit industry.

??In 2020, Huang Qin, Secretary of the Wuxi Municipal Party Committee, personally served as the leader of the integrated circuit industry chain, which illustrates that Wuxi places the high-quality development of the integrated circuit industry in the most important position, and indicates that Wuxi's integrated circuit industry chain will develop in a direction that is more concentrated, more complete, more extensive, and more deeply rooted.

Opportunities always come to those who are prepared

??The development and maturity of an industry cannot come out of thin air. This is especially true for the integrated circuit industry. The industrial heritage, talent reserves and awareness concepts,Wuxi is gifted, smart and diligent, and has seized a series of opportunities., let’s take a look at several important development nodes——

??In 1977, the linear integrated circuit production line for color TV sets was established in Wuxi

??In 1986, it was designated by the country as the Southern Microelectronics Base (Wuxi, Shanghai); China's first semiconductor research and production complex; China's first ultra-large-scale 64K DRAM integrated circuit was successfully trial-produced

??In 1989, China Huajing Electronics Group Corporation was established

??In 1990, the National Microelectronics 908 Project was implemented

??In 2000, one of the first seven integrated circuit design industrialization bases in the country

??In 2006, Wuxi Hynix Semiconductor officially put into production

??In 2015, Changdian Technology acquired Singapore’s STATS ChipPAC

??In June 2017, Hynix started the construction of the second factory and it was officially put into production in April 2019.

??In December 2017, Yixing Zhonghuan's leading large silicon wafer project started construction and was officially put into production in September 2019.

??In April 2018, Huahong Wuxi started construction and was completed and put into production in September 2019.

??In 2018, the Ministry of Industry and Information Technology approved Wuxi’s construction of a national “Xinhuo” mass entrepreneurship and innovation base.

??In 2020, the Ministry of Industry and Information Technology approved that Huajin Semiconductor Packaging Leading Technology R&D Center Co., Ltd. established the National Integrated Circuit Characteristic Process and Packaging and Testing Innovation Center

??……

??Here, the author sorts out several "milestones" based on research -

??"742" factory introduces Japanese production line

In early 1977, the country was preparing to introduce linear integrated circuit production lines for color TVs from Japan. Wuxi's "742" factory finally won the competition among many parties and built a professional factory specializing in the production of TV integrated circuits and a trial factory for MOS and bipolar integrated circuits. It has an annual output of 26 million pieces of 11 types of linear integrated circuits for color TVs.

??In 1987, Wuxi's annual output of integrated circuits reached 30 million units, accounting for nearly 40% of the national output.

Later, due to the implementation of the "908" project, integrated circuit-related industries developed rapidly in Wuxi. Wuxi's integrated circuit design industry, manufacturing, packaging and testing industry, supporting equipment and materials industry and other fields have always maintained domestic leading advantages. Dozens of design, packaging, testing, equipment, materials and service companies related to integrated circuit production have gradually been established in Wuxi and surrounding areas, as well as along the river and Shanghai-Nanjing line in the province. Wuxi is known as the "cradle" of my country's integrated circuit industry.

▲The picture shows Huajing Company, which left a deep memory for Wuxi people

??Changdian Technology merges with STATS ChipPAC

??After this battle, Wuxi's integrated circuit industry chain has become the largest in China and the third in the world, a truly multinational company.

??Changdian Technology Company, located in Jiangyin, was originally a small factory producing transistors that was on the verge of bankruptcy. It relied on technological innovation to become a domestic champion in individual fields and to be among the top in the world in less than 30 years.

In October 2015, when the international financial crisis broke out, Changdian Technology seized the opportunity, invested 260 million yuan and raised 780 million yuan through leverage, and in one fell swoop acquired half of the equity of Singapore's STATS ChipPAC, which was in trouble with a broken capital chain.

??After a struggle between capital and management, Changdian completed the goal of doubling its total assets in one-fifth of the original time. Its R&D and innovation capabilities were qualitatively improved, and it also gained a large number of first-line customers, including the top 20 major semiconductor companies in the world.

??After the merger, Changdian Technology has 7 production bases and 6 R&D centers in China, Singapore, South Korea, and the United States. Each of them has a clear positioning: the Singapore base is responsible for wafer-level high-end packaging and testing, the Korean base focuses on SIP system integration, Suqian and Chuzhou are positioned as low-cost production bases for discrete devices, and the headquarters is a production base for mid-to-high-end products.

??This process of small and large expansion has been described by the media as a "snake swallows the elephant" type merger. However, according to the 2014 global packaging foundry rankings, STATS ChipPAC's sales were US$1.58 billion, ranking fourth in the world, while JCET's sales were US$1.05 billion, ranking sixth in the world. It was already very powerful at the time.

▲The picture shows the production scene of Changdian Technology

??Huahong Wuxi project was completed and put into operation

??This project is one of the major industrial projects in Wuxi City’s “Thirteenth Five-Year Plan” and is also the largest single investment industrial project in Wuxi’s history.

??On August 2, 2017, Huahong Group signed a strategic cooperation agreement with the Wuxi Municipal Government. The Huahong Group's integrated circuit R&D and manufacturing base project with a total investment of approximately US$10 billion was officially settled in Wuxi High-tech Zone.

??The project covers an area of ​​about 700 acres, with an investment of US$2.5 billion in the first phase. It will build a new 12-inch integrated circuit production line with a process grade of 90-65 nanometers and a monthly production capacity of about 40,000 pieces to support applications in emerging fields such as 5G and the Internet of Things.

??On September 17, 2019, the project was completed and put into production, becoming the country's most advanced specialty process production line, the country's first 12-inch power device OEM production line, and the first independently controllable 12-inch production line in Jiangsu Province.

??This project is of particularly great significance, not only because of its large scale, but more importantly, its driving role and agglomeration role, which is mainly reflected in three aspects -

??First, the terminal applications targeted by this unique process platform are 5G communications, Internet of Things, including power management IC and other fields, which is very consistent with Wuxi’s own industrial development positioning and direction;

??Second, after chip manufacturing companies are established, design companies, packaging and testing companies, equipment, materials and other companies will form an increasingly strong agglomeration effect;

??Third, the industrial chains of Shanghai and Tin are perfectly connected. The layout of the chip industry in the Yangtze River Delta region is not only connected, but also scattered.

▲The picture shows the interior of Huahong Wuxi

??Zhonghuan’s leading large silicon wafer project starts construction

??This is another major breakthrough for Wuxi in the integrated circuit industry after the Huahong Wuxi production line was completed and put into production. The development pattern of the entire industry chain with "raw materials in Yixing, chip manufacturing in urban areas, and packaging and testing in Jiangyin" has gradually become clear.

??The integrated circuit industry is the commanding heights of global strategic competition. Semiconductor materials, as the cornerstone of the entire industry, play an important supporting role in the development of the industry.

??Large-diameter silicon wafers are the main raw material for manufacturing integrated circuits. For a long time, my country has relied almost entirely on imports of large-size silicon wafers above 8 inches. Domestic manufacturers are limited to small-scale trial production, which is far from meeting domestic market demand.

??To this end, Zhonghuan Co., Ltd. has integrated the superior resources of Tianjin, Inner Mongolia and Wuxi to carry out a national industrial layout. This project "relentlessly" made up for a major shortcoming in Wuxi's integrated circuit industry, and also led to the gathering of supporting companies.

▲The picture shows the exterior view of Yixing Central

??The National Integrated Circuit Characteristic Process and Packaging and Testing Innovation Center was settled

??It was established based on Jiangsu Huajin Semiconductor Packaging Research Center Co., Ltd. located in Wuxi, and its shareholders include industry giants such as Changdian Technology.

??This is the first national-level manufacturing innovation center in Wuxi and the first national innovation center in the new generation of information technology industry in Jiangsu Province.

??The country wants to shorten the last step from the laboratory to the product in the two major links of manufacturing and packaging and testing. This undoubtedly adds powerful "propellant" from the national level to Wuxi.

▲The picture shows the screenshot of the approval message from the Ministry of Industry and Information Technology website

I've always been very good at temperament.

??The "Thirteenth Five-Year Plan" is the best period in the history of Wuxi's integrated circuit industry project construction. It has attracted a number of major projects with high technological content, great development potential, and strong driving effects, with a total investment of more than 25 billion US dollars.

??Among them, 3 major projects exceed 10 billion yuan. The projects are currently progressing smoothly, all are ahead of the original construction plan, and the construction results exceed expectations. They have set a model for the construction of major integrated circuit projects in Jiangsu and even the country.

??Huang Anjun summed it up in one sentence: Do one thing and get it done without getting stuck!

??When talking about "temperament", I actually mean something, which is the contrast with the "Great Leap Forward" of chips in some cities in recent years.

??During the "Thirteenth Five-Year Plan" period, the average annual compound growth rate of sales of China's integrated circuit design industry reached 23.6%, which was nearly 6 times the average annual compound growth rate of the global semiconductor industry during the same period. The growth rate is quite impressive. The development momentum is improving, the technical level has been greatly improved, and the enterprise has accelerated its growth and expansion.

??But there are also some “weeds” in the overall “harvest.” "China Economic Weekly" reported that behind the national great leap forward in chip manufacturing, star chip projects in many places ended in failure, and the chips became "chip fraud", leaving a lot of chicken feathers.

??What’s even more weird is that there is an official website of “Advanced Integrated Circuit Industry Research Institute Co., Ltd.”. Netizens opened it and saw that the founder is Andy Lau, and Aaron Kwok, Liming, and Jacky Cheung are the vice presidents. "The Four Heavenly Kings came out, not to hold a concert, but to make chips. Is this serious?" asked a netizen.

??As of the time of reporting in 2020, six large tens of billions of semiconductor projects across the country have been suspended or in trouble. Except for Wuhan Hongxin, which is too "famous", the author will not name them one by one because they are more subtle...

??This triggered public opinion across the country and also attracted the attention of senior central officials. On October 20, 2020, the National Development and Reform Commission responded that "the chip project is unfinished."

Meng Wei, spokesperson of the National Development and Reform Commission, said that the enthusiasm for domestic investment in the integrated circuit industry continues to rise. Some "three-no" companies with no experience, no technology, and no talents have joined the integrated circuit industry. In some places, they do not have enough understanding of the laws of integrated circuit development and blindly embark on projects. The risk of low-level duplication of construction has emerged. There have even been cases where the construction of individual projects has stalled and factories have been vacant, resulting in a waste of resources.

??In view of the current chaos in the industry, the next step will be to focus on four aspects of work——Strengthen planning and layout, improve policy systems, establish prevention mechanisms, and consolidate the responsibilities of all parties. "Whoever supports, whoever is responsible".

??It’s not too late to make amends! I am especially grateful and proud of the actions of the successive Wuxi Municipal Party Committee and Municipal Governments that have been calm and pragmatic, made scientific decisions, and sought speed while maintaining stability.

??Aiming for “world-class”

??Entering a new round of development in the "14th Five-Year Plan", Wuxi has proposed: the short-term goal is to reach an industrial scale of 200 billion yuan in 2025, and the long-term goal is to become a domestic first-class and internationally renowned integrated circuit industry highland.

??At the beginning of this year, the explanation of the "Recommendations of the Wuxi Municipal Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for Wuxi's National Economic and Social Development and the Long-term Goals for 2035" proposed to improve the modernization level of the industrial chain, adhere to independent control, safety and efficiency, and deepen "chain creation and supplementation." Chain, Strong Chain, Extended Chain" project to accelerate the creation of 10 landmark industrial chains such as the Internet of Things, integrated circuits, biomedicine, and high-end equipment. The scale of integrated circuits, biomedicine and other industries will be doubled, and a number of world-class advanced manufacturing clusters will be formed to create a global advanced manufacturing base.

??▲The picture shows that on October 20, 2020, Xishan Economic and Technological Development Zone held the "'Core' Valley Sets Sail, 'Core' Moves Xishan" development zone integrated circuit industry project cooperation and exchange event. A total of 12 chip projects were signed and settled, including Huawei, Xiaomi ecological chain enterprise Hanxin Micro, ZTE and Huawei strategic partner Celtic, BOE and Xiaomi supplier Sea Whale Semiconductor, as well as MEMS sensor chip projects, surge protection chip projects, fully integrated transceiver chip projects for optical communications, etc.

??The ambition is clearly revealed. The author noticed a key word during the interview——"Industrial chain"。

??Strengthening the industrial chain has been a goal that Wuxi has been striving for in recent years.

??Among the three links of the integrated circuit industry chain, the pressure on chip design and development is relatively high, and the competition it faces is also the strongest. How to break through?

??Huang Anjun believes that,The first is to win a bigger piece of the pie from existing stocks, and the second is to develop incremental growth in emerging fields.。

??The former should be good at leveraging financial capital to quickly expand its scale through post-listing acquisitions and mergers, changing the current situation of being small and fragmented, and forming several "big players"; the latter should actively enter emerging fields such as 5G, artificial intelligence, the Internet of Things, driverless driving and new energy.

??Talent issues are also a key factor that may restrict the potential of industrial development. Wuxi, especially, has insufficient reserves of high-end talents.

??Wuxi has introduced a series of policies and measures to attract talents, but related supporting policies need to be further strengthened and reformed to truly attract and retain talents. It is reported that governments at the municipal and district levels are about to introduce a new version of the integrated circuit talent policy. Wuxi's integrated circuit industry thrives because of talents, and the city will surely become a world-class "Silicon Valley" because of talents.