The semiconductor industry chain is typically divided into three main segments:
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Upstream: The supporting industry, including EDA software, IP cores, semiconductor equipment, and new materials.
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Midstream: The core manufacturing industry, including chip design, manufacturing, and packaging/testing.
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Downstream: The end application industry, integrating chips into various products.
1. Upstream: The Foundation and High Ground of the Industry
This segment is the cornerstone of the semiconductor industry and also the segment with the highest technical barriers and core importance, dominated by a few international giants. The upstream directly determines the performance ceiling of chips, mainly consisting of three categories: EDA and IP cores, semiconductor equipment, and semiconductor materials.
| Category | Details | Representative Companies |
|---|---|---|
| EDA and IP Cores | EDA is essential software for chip design, known as the “mother of chips”; IP cores are reusable functional modules, pre-designed and reusable functional blocks, such as CPU cores and GPU cores. Design companies can purchase IP cores to quickly build their own chips without starting from scratch. | International giants include Synopsys and Cadence; domestically, EDA leader Huada Jiutian and IP licensing service provider Chipone are notable. |
| Semiconductor Equipment | These are the “tool stations” for chip manufacturing and packaging/testing, with photolithography machines, etching machines, and thin-film deposition equipment being the three core devices of the front-end process, accounting for over 60% of the equipment market share. | Dutch company ASML monopolizes the EUV photolithography machine market; American companies Applied Materials and Lam Research dominate etching and thin-film equipment; domestically, SMIC has made breakthroughs in etching equipment, and Topwin Technology in thin-film deposition equipment, but the overall gap remains significant. |
| Semiconductor Materials | The “raw materials” for chip manufacturing, divided into wafer manufacturing materials (such as silicon wafers and photoresists) and packaging materials. Third-generation semiconductor materials like silicon carbide and gallium nitride are rapidly emerging. Their purity and quality are crucial for chip performance. | Japanese companies Shin-Etsu Chemical and SUMCO dominate the silicon wafer market; domestically, Shanghai Silicon Industry is catching up in the large wafer field, while Nanda Optoelectronics and Jingrui Electric Materials are gradually breaking through in the photoresist field. |
2. Midstream: The Core Manufacturing Segment
This is the core transformation segment of the industry chain, requiring significant capital investment, responsible for turning design blueprints into physical chips, covering three sub-segments: chip design, wafer manufacturing, and packaging/testing.The mainstream model of modern semiconductor industry is to split the complex manufacturing process among different companies, lowering the industry threshold.
| Category | Details | Representative Companies |
|---|---|---|
| Chip Design | This is a light-asset, high-value-added segment responsible for defining chip functions and designing circuit layouts, without involving chip manufacturing. | Internationally, there are leaders like Nvidia, Qualcomm, and Apple; domestically, Huawei HiSilicon is a leader, while Weir Shares, Cambricon, and GigaDevice lead in image sensors, AI chips, and memory chips, respectively. |
| Wafer Manufacturing | This involves transferring circuit diagrams onto silicon wafers through hundreds of processes like photolithography and etching, with process technology being the core competitiveness. | Taiwan Semiconductor Manufacturing Company (TSMC) is the global leader in foundry, dominating advanced processes of 3nm and below; Samsung and Intel represent the IDM model; domestically, SMIC is the most technologically advanced and largest foundry, while Huahong Semiconductor has advantages in specialty processes. |
| Packaging and Testing | This involves cutting, packaging, and testing the manufactured wafers to obtain the final chip products. Packaging provides protection for chips and establishes external connections, with advanced packaging technology enhancing the value of this segment. | Globally, ASE Technology is a leader; domestically, JCET ranks among the top three globally, while Tongfu Microelectronics and Huatian Technology are also significant players in the industry. |
Currently, ecosystems are accelerating construction through closed loops like Huawei + SMIC + JCET, BYD + Horizon + Huahong, etc., for “design-manufacturing-packaging/testing”.
Some companies can independently complete all segments of design, manufacturing, and packaging/testing, this business model is called IDM (Integrated Device Manufacturer), with representative companies includingIntel, Samsung, SK Hynix, Micron, and Texas Instruments.
3. Downstream: Driven by End Applications
This is the final outlet and value realization point of the semiconductor industry, where all chips converge.
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Consumer Electronics: This is the most traditional core application area for semiconductors, including smartphones, computers, tablets, televisions, etc. This is one of the largest markets. Companies like Huawei and Xiaomi in the smartphone sector, and Lenovo and Apple in the computer sector are core demanders of chips, with a large number of applications such as Zhuoshengwei’s RF chips and Hengxuan Technology’s smart audio chips.
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Automotive Electronics: The demand for automotive-grade chips and LiDAR chips is surging due to new energy vehicles and intelligent driving, covering power semiconductors, memory chips, sensors, etc. Companies like BYD and Tesla have a growing demand for silicon carbide power chips and autonomous driving chips, with products from Wentai Technology and Silicon Motion widely used in this field.
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Artificial Intelligence:Artificial intelligence, cloud computing, and the Internet of Things are becoming new growth engines. Large models (such as DeepSeek and Doubao) are driving the demand for computing power chips; IoT devices rely on low-power, small-sized MCU chips, with products from GigaDevice and Beijing Junzheng making strides in this field.
- Data Centers and Cloud Computing:Nvidia’s H20, Ascend, and Cambricon are accelerating GPU/ASIC deployment, with AI servers from companies like Baidu and Alibaba requiring Nvidia’s GPU chips or domestically produced AI chips from Cambricon;
Currently, mainland China has achieved certain competitiveness in packaging/testing and some chip design areas, but in the upstream EDA, equipment, and materials, as well as the most advanced chip manufacturing segments, achieving full-chain autonomy remains a severe challenge.