In recent years, semiconductor companies have been pursuing smaller line widths under the “baton” of Moore’s Law in order to improve the performance of chips and reduce their costs. However, as the process of the chip gradually approaches the physical limit, the cost of each process node becomes high. Therefore, optimizing the cost of the device and improving its overall performance through “non-size-dependent characteristic process” has become another development of the integrated circuit industry. way.
Taking the “road” of characteristic craftsmanship has helped many manufacturers to obtain high revenue. On August 27, SMIC released its first semi-annual report after its listing on the Science and Technology Innovation Board, achieving an operating income of approximately US$1.843 billion, a record high and a year-on-year increase of 26.3%; in terms of mature processes, SMIC’s capacity utilization continued to be fully loaded. , Cameras, power management, fingerprint recognition and special memory and other related applications are in great demand. In addition to SMIC, which is the “first show” on the Science and Technology Innovation Board, Hua Hong Semiconductor, which focuses on characteristic technology, reported revenue of US$225.4 million in the second quarter, an increase of 11.1% from the previous quarter. The advantage of characteristic technology has become the main growth point of its profits.
Featured process becomes another path for IC manufacturing
Different from the advanced process that continuously pursues the reduction of transistor size under Moore’s Law, the characteristic process does not fully pursue the reduction of device size, and the increase of functions can also improve the performance of the chip. As Moore’s Law inevitably pushes the physical limit, the soaring cost of IC manufacturing makes scaling down the process even more difficult. In this context, characteristic processes such as micro-electromechanical systems (MEMS), radio frequency, high voltage, power management, 2.5D and 3D advanced packaging have become the “sweet pastry” in the eyes of semiconductor manufacturers and are sought after by manufacturers.
The characteristic process has the advantages of non-size dependence, relatively mature process, low investment in product research and development, and a wide variety of products. Therefore, in order to better balance cost, performance and power consumption, the characteristic process has been approved by major global crystals such as TSMC, GF and UMC. Round foundries are highly valued. Luo Zhenqiu, general manager of TSMC (Nanjing) Co., Ltd., said at the 2020 World Semiconductor Conference that in order to feel the function of the chip, special technology is an indispensable “process”. Luo Zhenqiu believes that if the function of the chip is compared to the signal that is intended to be transmitted, the special process is the WiFi that transmits the signal. Therefore, only by continuously advancing the special process can the performance of the chip be brought into full play.
In addition to the clear statement at the 2020 World Semiconductor Conference, the investment case announced by TSMC at the end of 2018 has already shown their strong demand for special processes. In order to add new production lines, after building an 8-inch fab in Shanghai in 2003, TSMC built a new 8-inch wafer fab in Tainan Science Park, and invested in a new 8-inch wafer production capacity.
UMC has a clear leading edge in the specialty process foundry market. In the field of panel driver and organic light-emitting diode (OLED) IC, UMC has a leading market share. Under the guidance of the pragmatic development strategy, UMC continues to strengthen the research and development of mature process platforms. The 22nm ultra-low power (ULP) process is the key area of UMC’s deep cultivation, and 55/65nm, 40nm and 28nm have also become main force.
Another foundry giant, GlobalFoundries, announced in 2008 that it would abandon the research and development of 7nm and more advanced processes and switch to a characteristic process platform. Based on the strong customer demand for existing process differentiation technologies and the high R&D cost of advanced process nodes, GF decided to use the characteristic process to continuously improve chip performance in the case of unsustainable transistor scaling based on the development status of semiconductor manufacturing processes. better meet market demands.
“Walking on Two Legs” Strategy Brings Fire Feature Craft
At present, the strategy of “walking on two legs” in which characteristic technology and logic technology are simultaneously improved has become the industry consensus of China’s semiconductor industry. As the characteristic process is an industry with many types, strong correlation of applications and no monopoly, the industry is more optimistic about its development prospects, so its development and expansion speed is also very fast. According to the statistics of TrendForce, before 2016, the total production capacity of China’s 8-inch special process production line was 756,000 pieces, and there was no 12-inch special process production line. From 2016 to 2018, China has built (planned) 10 8-inch special process production lines and 6 12-inch special process production lines, with a total monthly production capacity of nearly 1.1 million pieces (8-inch equivalent), showing that the characteristic process production lines and The rapid growth of production capacity.
The rapid development of special craftsmanship has further increased the market share of its related products, and special crafts products almost occupy “half of the country” in the domestic market. The “2019 China Semiconductor Featured Process Market Analysis Report” shows that the domestic market of featured process products accounts for about 40%, and the products included are mainly embedded non-volatile memory, analog ICs and OSD products (optical devices, sensors, discrete devices ).
There are many characteristic technology platforms, and the use of special technology to build competitive barriers can enable manufacturers to take the lead in production capacity and achieve high profitability. Therefore, various Chinese semiconductor companies have invested in the production of characteristic technology. As the “leader” of China’s local foundry, SMIC is actively expanding its 8-inch production capacity in Tianjin, Shenzhen, Ningbo, Shaoxing and other places in addition to developing 14nm and below logic process technology. At this stage, the characteristic technology is mainly 8 inches, which means that SMIC has also actively invested in the research and development of characteristic technology in order to achieve product differentiation. In addition, Hua Hong Grace, which focuses on the foundry of differentiated technologies, has established a number of differentiated process platforms, including embedded non-volatile memory (eNVM), power discrete devices (discrete), analog and power Manage ICs, Radio Frequency (RF), etc.
Dedicating to the research and development of characteristic process platforms may be the only way for most domestic semiconductor companies to develop. Mo Dakang, an expert in the semiconductor industry, pointed out in an interview with a reporter from China Electronics News that for the vast majority of Chinese semiconductor companies, their primary task is to survive, so achieving profitability is their top priority for development. In this case, it is not objective to just let them track Moore’s Law or try the IDM mode of memory.
Differentiated market demand drives the development of characteristic processes
The implementation of 5G technology and the popularization of technologies such as the Internet of Things have made the market prospects of characteristic processes broader. Diversified and differentiated market demands have injected new impetus into the sustainable development of the semiconductor characteristic process market. Fan Heng, executive vice president of Hua Hong Grace, told reporters that with the development of the semiconductor industry and the increasing diversification of terminal applications, the market demand for differentiated processes is also increasing. Especially for smart cards, power management chips and discrete devices, which account for the absolute majority of semiconductor chip types, from the perspective of manufacturing cost, production stability and delivery reliability, the characteristic process is a better choice.
In recent years, the demand for special crafts in emerging markets driven by emerging technologies has continued to skyrocket, and the market demand for special crafts has continued to heat up.
As one of the important contents of new infrastructure, the development of new energy vehicles has put forward higher requirements for the miniaturization and light weight of electric drives. Silicon carbide (SiC) material has excellent physical and chemical properties such as high pressure resistance, high temperature resistance, high efficiency and high frequency, which can greatly improve the conversion efficiency of existing energy and meet the needs of electric drive miniaturization and light weight. Therefore, SiC power devices have many advantages in the application of new energy vehicles, and have become one of the important explosive points of the characteristic process market. In addition, since the related technologies of SiC power devices are basically mature, the market is also at a critical point of rapid growth.
The commercialization of 5G has also significantly increased the market demand for characteristic processes. Zhao Haijun, co-CEO of SMIC, said in the second-quarter earnings conference call, “After the demand for 5G-related applications increases, the demand gap for the two mature processes of 0.18 micron and 0.15 micron is particularly large.”
In addition, the demand for sensors and Bluetooth chips in the Internet of Things, and the demand for image sensors in smartphones and machine vision will all be the future market explosion points.
However, the rapid development of the semiconductor industry poses an important problem for foundries in mainland China. The high R&D investment and cost of advanced technology are not equal to the profits obtained. The customer base who can afford and use advanced technology in the future is decreasing, and a large amount of revenue still comes from mature technology. In response to this, UMC has three good strategies that are worth learning from: First, semiconductor companies should not rush to pursue the development of advanced technology, and should make steady progress in the technology they have mastered and strive for perfection. Second, semiconductor companies should embrace the mature and characteristic process market, adopt the strategy of “walking on two legs”, and make breakthroughs in the mature and characteristic process market with broader demand. Third, semiconductor companies should learn from advanced management experience based on their own conditions. After all, only a few companies are likely to participate in the competition for advanced processes, and more wafer manufacturing companies still have to face a broader mature and featured process market.