The domestic production of semiconductors is actually a response to external pressures.
After the US-China trade war in 2018, with the US cutting off supplies (such as halting chip supplies to Huawei), we realized how dependent we are on imported high-end chips.
The government quickly invested heavily to achieve self-sufficiency, with the National Integrated Circuit Industry Investment Fund investing over 300 billion yuan in two phases to support companies like SMIC and Yangtze Memory Technologies.
Now we have HiSilicon for design, SMIC for manufacturing, and JCET for packaging and testing, gradually piecing together the industry chain.
However, the most challenging processes below 7nm and lithography machines still rely on ASML, and domestic efforts are still striving to catch up!
Yesterday, I studied the upstream of the semiconductor industry chain—equipment and materials.
Today, let’s look at the midstream—manufacturing and packaging/testing.
The midstream mainly involves packaging/testing—advanced packaging materials and equipment—EDA in several stages.
1. Packaging/testing stage: Dominated by domestic leaders
Tongfu Microelectronics: The largest and most comprehensive packaging/testing company in China, covering high-end packaging technologies.
JCET: The third largest globally and the largest in China, a leader in packaging/testing with advanced technologies such as RF-SIM card packaging.
Yongxi Electronics: One of the few manufacturers capable of mass-producing advanced packaging, leading in SiP (System in Package) technology.
Liangxin Chips and Weicai Technology: Focused on chip testing, promoting domestic substitution.
2. Materials and equipment: Key supporting elements
Packaging substrates: Xingsen Technology (the largest PCB sample manufacturer in China), Shennan Circuit (a pioneer in packaging substrates).
High-end materials: Debang Technology (backed by the National Fund), Fangbang Co., Ltd. (a leader in electromagnetic shielding films).
Equipment manufacturers: Changchuan Technology (testing equipment), Huafeng Measurement and Control (semiconductor testing), Xinyi Chang (LED packaging equipment).
3. EDA/IP: Breakthroughs in domestic production
Huada Jiutian: A leading domestic EDA company, excelling in analog chip tools.
Gailun Electronics: Internationally recognized for device modeling EDA tools.
Guangli Micro: Focused on yield improvement, closely collaborating with SMIC.
Xinyuan Co., Ltd.: A leading domestic IP company providing one-stop chip customization services.
The downstream of semiconductors mainly involves applications: communication, consumer electronics, AI, etc., with strong demand.Domestic substitution is gradually advancing,but core chips (such as CPUs and GPUs) still rely on imports,and we still have to look to Intel and NVIDIA…
These A-share companies are working hard, but high-end core chips still depend on imports:
Communication: ZTE (base station FPGA/CPU), Unisoc (switching NPU)
Consumer electronics: Wingtech Technology (mobile SoC), Zhaoyi Innovation (DRAM controller)
AI: Cambricon (GPU), Haiguang Information (high-end GPU)
PS:
The core companies for domestic CPUs include:
Loongson Technology (688047): Independent instruction set LoongArch, usable for PCs/servers, the most thorough domestic production.
Haiguang Information (688041): AMD x86 licensed, strong server CPU, common in data centers.
China Great Wall (000066): Feiteng’s ARM architecture CPU, widely used in government and finance.
Huawei HiSilicon (not listed): Kirin mobile chip + Kunpeng server CPU, unfortunately difficult to produce after sanctions.
Zhaoxin (not listed): x86 architecture, backed by Shanghai State-owned Assets Supervision and Administration Commission, focusing on PCs and embedded systems.
Jingjia Micro (300474): Producing GPUs, often paired with Loongson.
Additionally, companies like Cambricon and Lanke Technology, while not specifically CPU manufacturers, are closely related to the domestic CPU ecosystem.
Currently, domestic CPUs are gradually replacing imports in government and finance sectors, but the high-end market is still dominated by Intel and AMD.
The core companies for domestic GPUs include:
Jingjia Micro (300474): The leading domestic GPU company, with the JM9 series performance close to GTX 1050, mainly used in military and trusted computing fields.
Haiguang Information (688041): Its Deep Computing No. 1 DCU (similar to GPU) focuses on AI computing, compatible with the CUDA ecosystem.
Cambricon (688256): The Siyuan series AI chips include GPU modules, focusing on cloud intelligent computing.
Birun Technology (not listed): The BR100 series achieves international flagship performance but faces manufacturing limitations.
Moore Threads: The MTT S80 gaming graphics card performance is comparable to RTX 3060, compatible with DirectX.
Xindong Technology (not listed): The Fenghua series focuses on domestic independent architecture, covering desktop/server markets.
The road to domestic substitution in semiconductors is long and arduous; although there have been breakthroughs, core links are still being “choked off.”
EDA (the mother of chips): Domestic EDA companies (like Huada Jiutian and Gailun Electronics) have made breakthroughs in some point tools, but full-process solutions are still lagging.
Breakthrough direction: Strengthen industry-university-research cooperation, accelerate the construction of the domestic EDA ecosystem.
Photoresist (the highest barrier in semiconductor materials): Domestic companies are concentrated in low-end PCB photoresists, while high-end KrF and ArF photoresists rely on imports.
Breakthrough direction: Improve the purity and resolution of photoresists, accelerate verification and introduction into wafer fabs.
Photolithography machines (the king of semiconductor equipment): Shanghai Microelectronics can produce 90nm photolithography machines, but EUV is still monopolized by ASML.
Breakthrough direction: Strengthen the localization of core components (such as light sources and optical lenses), such as Fuzheng Technology (laser crystals) and Aopu Optoelectronics (optical systems).
Advanced packaging (Chiplet): The four major domestic packaging/testing companies (JCET, Tongfu, Huada, and Jingfang) have laid out 2.5D/3D packaging, becoming a breakthrough point for domestic substitution.
Breakthrough direction: Promote Chiplet standardization, enhance heterogeneous integration capabilities.
In summary, China’s semiconductor industry has competitive advantages in packaging/testing and mature process manufacturing, but EDA, photolithography machines, and high-end photoresists remain core “choke points.”
In the short term, focus on the domestic substitution of materials and equipment, and in the long term, layout EDA and advanced processes.
The domestic production of semiconductors is a long-term battle, but new technologies like Chiplet may be the key to overtaking on the curve.
PS:
Today, funds are pouring into the semiconductor and computer sectors, with the technology track still being the main line of the market….
Communications and electronics manufacturing are also rising, but automotive and chemical pharmaceuticals are being sold off, possibly related to industry adjustments.
Overall, funds are concentrated in hard technology, and market sentiment is quite optimistic!
That’s all for today, closing up!