On October 14th, the 3rd Global IC Entrepreneurs Conference and the 18th China International semiconductor Expo (IC China2020), hosted by the China Semiconductor Industry Association and China Electronics and Information Industry Development Research Institute, opened in Shanghai. The President and CEO of the American Semiconductor Industry Association, John Newfair, delivered an opening speech entitled “The Dilemma and Solutions of the Semiconductor Industry”.
Challenges for the global semiconductor industry
From artificial intelligence to 5G, from autonomous driving to quantum computing, semiconductors provide a critical foundation for digitalization and exciting discoveries in our lives. According to John Neufell, semiconductors have been the driving force behind the growth of the digital industry over the past few decades. Global semiconductor industry sales have tripled since 1995, and despite the challenges of the COVID-19 pandemic, the future of the global semiconductor market looks bright. WSTS expects global semiconductor industry sales to rise this year and reach $452 billion next year.
Since the outbreak of the new crown pneumonia epidemic, the importance of semiconductor technology to social information systems has become increasingly prominent. “In this context, global industrial cooperation is crucial to building a complex semiconductor ecosystem. It is expected that in the coming year, global cooperation around the semiconductor industry will be more important than ever.” John Neufel pointed out.
John Neufel pointed out that the current semiconductor industry is facing unique and daunting challenges. On the one hand, as Moore’s Law approaches the physical limit, the cost of innovation is constantly increasing. On the other hand, affected by the epidemic, the risk of anti-globalization wave is also increasing, the global economic situation is worrying, the demand of the semiconductor industry has been greatly reduced due to the impact of the epidemic, and the industry is uncertain in the short term.
John Neufel further stated that semiconductor companies have increased Moore’s Law to a level once thought impossible by continuously shrinking circuits on chips to improve performance. The cost of chip innovation has continued to rise, and the capital expenditure and R&D investment of continuous innovation have also increased. of increase. U.S. semiconductor companies spend roughly one-fifth of their revenue each year addressing the challenge of innovative R&D. According to data, in 2019, US semiconductor companies invested nearly 40 billion US dollars in this area.
Maintaining the global semiconductor supply chain is critical
John Neufel said that countries around the world continue to build up the supply chain of the semiconductor industry chain. Looking at the global market, Japan is the leader in equipment and materials, South Korea occupies the dominant position in the global memory and storage market, Taiwan is the leader in the field of semiconductor foundry, and mainland China has strong OSAT and wafer design capabilities.
In John Newfair’s view, China is the world’s largest consumer electronics market and the largest market for the US chip industry. In 2019, the Chinese market accounted for 36% of U.S. semiconductor company revenue, and China was the largest exporter of personal computers, smartphones, TVs and wearable electronics.
John Neufel emphasized that the scale of China’s semiconductor industry is growing, and its importance to the global semiconductor industry is gradually emerging. One is to move up the value chain. From 2013 to 2020, the compound annual growth rate of China’s semiconductor industry is 15.7%, and more than 2,000 integrated circuit design institutions have gathered, making significant progress in OSAT. Second, the speed of factory construction has accelerated. Currently, there are more than 60 factory projects in progress in China. The third is the strong support of government policies. China has invested about $1.4 trillion in new infrastructure such as 5G and data centers, and has introduced a number of semiconductor-related incentives.
The global semiconductor ecosystem is a complex and interdependent network that gathers the power of countries around the world and is critical to maintaining the global semiconductor supply chain and continuing semiconductor innovation. John Neufel emphasized that strong global industrial ties make our industry better able to withstand external uncertainties, and suggested that policymakers in various countries take the following measures to actively consolidate the semiconductor industry ecology:
One is to expand access to the global market, such as eliminating tariffs and reducing the burden on semiconductor exports. The second is to maintain supply chain flexibility and introduce more non-discriminatory market supply chain flexibility incentives. The third is to improve and enforce fair and just international trade rules, focusing on intellectual property protection and encryption rules. The fourth is to promote innovation and intensify efforts to tap talents for integrated circuit development.
The development of the semiconductor industry has a long way to go. After all, the vigorous development of electronics, energy, industry, agriculture, transportation, medical care and other industries is closely related to it. “Our semiconductor industry needs continuous innovation and growth, which requires more dialogue and communication between countries around the world, especially the United States and China, on important issues in the semiconductor industry, so as to jointly promote the vigorous development of the industry.” John Newfair emphasized.