Interpretation of the white paper on the development trend of global semiconductor market

At present, the rapid development of big data, cloud computing, Internet of things, artificial intelligence and other information industry technologies continues to provide strong market demand for the semiconductor industry, and the global integrated circuit industry will usher in a new round of development opportunities.

The global semiconductor market reached $468.8 billion in 2018, up 13.7 percent year-on-year, according to the global semiconductor trade association (WSTS).The market for analog chips, microprocessors, logic chips and memory is $58.8 billion, $67.2 billion, $109.3 billion and $158 billion, respectively.In 2018, the global memory market still led the growth, reaching 27.4%.The analog chip market grew 10.7 percent, the processor circuit market 5.2 percent, and the logic chip market 6.9 percent.

Current state of the global semiconductor market

In terms of the size and growth rate of the global semiconductor market, the global semiconductor market reached 468.8 billion us dollars in 2018, with a growth rate of 13.7%.

Semiconductor products can be divided into integrated circuits, optoelectronic devices, discrete devices and sensors four categories.Among them, integrated circuit is the core of semiconductor industry.As the leading type of semiconductor industry, integrated circuit has driven the rapid growth of global semiconductor industry from 1960s to 1990s since its birth. The development of integrated circuit industry has been on an upward trend, but its production and demand are not stable.From the perspective of year-on-year growth rate of semiconductor sales, the global semiconductor industry generally takes 4-6 years as a "silicon cycle", and the business cycle is closely related to macroeconomic, downstream application demand and its own capacity inventory and other factors.

The semiconductor market has gone through several ups and downs in the past 20 years. The bursting of the Internet bubble in 2000 led to a two-year industry correction, which restarted in 2004 by gathering energy.After the introduction of 12-inch silicon wafers, the industry began another round of capacity expansion competition. Until 2008, the global semiconductor market showed negative growth, and in the first half of 2009, it fell by 25%.With the rise of terminal electronic products such as apple's iPhone and iPAD, the semiconductor industry entered another historic peak in 2010 with a very strong momentum.The semiconductor market hovered around $300 billion until 2016 and topped $400 billion in 2017.The global semiconductor market reached $468.8 billion in 2018, up 13.7 percent year on year and one of the fastest growth years since 2010, according to the global semiconductor trade association.

In terms of the size of the global semiconductor market segment, memory has been the largest application field for two consecutive years.

In terms of specific products, the market size of integrated circuits, discrete devices, photoelectric devices and sensors in 2018 was $393.3 billion, $24.1 billion, $38 billion and $13.4 billion respectively.The growth rate of IC market size fell back to 14.59%;Discrete device market size growth fell slightly, reaching 11.1%;The market size of optoelectronic devices continues to grow, with a growth rate of 9.2%.The sensor market is down sharply, with growth of just 6.3%.

IC products are divided into analog chips, microprocessors, logic chips and memory. In 2018, the market size was us $58.8 billion, us $67.2 billion, us $109.3 billion and us $158 billion, respectively, accounting for 14.95%, 17.09%, 27.79% and 40.17% of the IC market share.In 2018, the global memory market still led the growth, reaching 27.4%.The analog chip market grew 10.7 percent, the microprocessor market 5.2 percent, and the logic chip market 6.9 percent.

In terms of the size and growth of the semiconductor market in major countries and regions, China led the world in terms of the size and growth of the semiconductor market in 2018.In terms of regional market structure, China's share reached 33.8 percent in 2018, while the United States, Europe, Japan and other Pacific rim regions accounted for 22 percent, 9.2 percent, 8.5 percent and 26.5 percent, respectively.In terms of growth rate, China still leads the world in 2018, with a growth rate of 20.5%, 6.8 percentage points higher than the global growth rate.The us, Europe, Japan and other Pacific rim regions recorded growth rates of 16.4 per cent, 12.3 per cent, 9.3 per cent and 6.1 per cent respectively.

In terms of the size of the global semiconductor terminal application market, the communication and computer segments accounted for the largest proportion in 2018.

Communications and computers are already the world's largest users of semiconductors, accounting for 32.4 percent and 30.8 percent respectively in 2018.Benefiting from the popularization and application of new communication technologies, the proportion of communication chips increased from 21.2 percent in 1999 to 32.4 percent in 2018.The market share of computers has been gradually replaced by emerging electronic products such as smartphones and tablets. The market share of computer chips dropped from 50.4 percent in 1999 to 30.8 percent in 2018.

With the popularization of automobile electronization, electronization, electrification and intelligentization have gradually become the development trend of automobile semiconductor, which has increased the proportion of automobile semiconductor from 5.9% in 1999 to 11.5% in 2018.In addition, with the acceleration of the global industry 4.0 process and the continuous increase of digitization, networking and intellectualization of industrial equipment, the demand for semiconductors in the industrial field is increasingly booming, accounting for 12% in 2018, up from 7.6% in 1999.

Global semiconductor market outlook

The global semiconductor market grew 13.7 percent to $468.8 billion in 2018, a record high.It is expected to decline by 3.0 percent to $454.5 billion in 2019, with moderate growth and a return in 2020.

Applications in the United States, Europe and the asia-pacific region are expected to show negative growth in 2019 after two consecutive years of strong growth.The memory market will decline by 14.2%, and growth in other products will slow.

The main factors driving the future development of the global semiconductor market include device innovation, technology innovation and product innovation.

Device innovation.The semiconductor industry based on near equilibrium physics has matured, and the semiconductor industry technology is approaching its limit.Although there are more and more challenges in the development of silicon-based CMOS technology that relies on the shrinking feature size, the innovation of devices that do not rely on the feature size keeps coming.In particular, the development of MEMS devices and system-level packaging technology (SIP) makes the meaning of "integration" of integrated circuits more extensive.The discovery of graphene in 2004 offers the most likely path to the next generation of faster, larger, cheaper and lower-power integrated circuits.Although there are still many difficulties in the preparation of graphene FET(field effect transistor), based on the excellent intrinsic electronic properties of graphene and the progress in the development of graphene FET in recent years, carbon-based integrated circuits may become an important development trend.

Technological innovation.Silicon based CMOS technology is facing many major challenges that have never been seen before.When transitioning from 28nm to 22nm or even smaller feature sizes, planar Mosfet is replaced by three-dimensional FinFET.EUV(extreme ultraviolet) lithography or electron beam lithography will replace the current 193nm immersion lithography to produce finer line widths.Using 18-inch (450nm) wafers and building a single-chip automated wafer assembly line may be new solutions on an economic scale.As you can imagine, semiconductor chip technology will enter a relatively new era when the characteristic size is 5/3nm and below.

Product innovation.Product innovation is the eternal power to promote the development of semiconductor industry.Even if Moore's law fails, product innovation remains the dominant factor leading the semiconductor industry to maintain its rapid development.At present, the world's integrated circuit products have gone through the product characteristic cycle of Tr(transistor), ASSP(standard and universal product), MPU(microprocessor), Asic(special IC), fpga(field programmable gate array), SoC(system-level chip), and are now undergoing the transition to u-soc (super-system-level chip).Every requirement of the new generation of information technology is likely to stimulate the birth of a new generation of semiconductor products.

Global semiconductor market development trend

The global semiconductor market will show five major trends in the future.

First, emerging applications such as 5G and AI have become driving forces for market growth.With the further shrinking of the traditional PC market and the decline of the demand for mobile intelligent terminals, emerging applications such as 5G, AI, automotive electronics and IoT have become important new growth points in the semiconductor market.In terms of 5G, the development of 5G network equipment and terminals will bring huge market demand for chips. The industry believes that 5G will achieve large-scale commercial use in 2020, which will drive the semiconductor market worth hundreds of billions of dollars.In the early stage of 5G commercial development, operators carry out large-scale network construction, and the equipment manufacturing revenue brought by investment in 5G network construction will become the main source of 5G's direct economic output.It is estimated that by 2020, the revenue of network equipment and terminal equipment will exceed 500 billion yuan, greatly driving the demand of semiconductor market.In terms of artificial intelligence, ai computing tasks can be accelerated by means of gpu, FPGA, ASIC and other chips combined with software algorithm library, bringing new market growth space for the field of integrated circuits.At the same time, ai chips are integrated with deep learning algorithms and specific scenarios, providing new development opportunities for global chip start-ups.

Second, Moore's law continues to be a key driver of technological development.Although Moore's law has slowed down in the past two years, many physical limits are still being broken and refreshed, and the semiconductor industry continues to advance along Moore's law.At present, the most advanced mass production process has reached 7nm and 5nm, and the industrialization of the process has made a major breakthrough, and is expected to continue to advance to 3nm process.Intel, TSMC, samsung and other leading companies continue to advance advanced technology.Intel will produce 10nm in 2018 and 7nm after 2020.TSMC and samsung have both announced the adoption of deep uv (EUV) lithography. TSMC has invested in a new 5nm production line and will start construction of a 3nm process plant after 2020.

Third, the innovation of products and technologies beyond Moore's law is active.While the semiconductor technology continues to continue the development of Moore's law, the beyond Moore's law, characterized by new materials, new structures and new devices, provides a new development direction for the semiconductor industry.On the one hand, three-dimensional heterogeneous device system integration has become a development trend, Intel, samsung, TSMC and other enterprises in the field of three-dimensional device manufacturing and packaging rapid development.Intel and micron launch a revolutionary new 3D Xpoint technology;Samsung realized multi-layer 3D NAND flash memory, becoming a disruptive product in the storage field.TSMC's integrated fan out wafer level packaging (InFowlp) technology is used in apple's latest processors.On the other hand, the cross penetration of multi-disciplines such as microelectronics and computer science and information technology is increasingly deepening, which promotes the emergence of innovative technologies such as new micro-electromechanical system technology, wide-bandgap semiconductor material devices, two-dimensional materials and neural computing, and quantum information devices, expanding the development direction of semiconductor technology.The Moore industry does not pursue the size of devices, but promotes the continuous and rapid development of the semiconductor industry by studying new principles, new processes, new materials, new devices and new equipment to accelerate the transformation of processors, memories, simulators and power devices.

Fourth, the industrial comprehensive competitiveness to the system, ecological evolution.With the increasing competition of products, the mode of industrial competition is changing to the systematic and ecological direction.On the one hand, mergers and reorganizations centering on the ecological layout of emerging fields are active.Softbank bought ARm to focus on the Internet of things, samsung bought harman to enter the automotive electronics industry, and Intel bought Mobileye, an Israeli company, to build an overall solution for driverless cars.On the other hand, the application of the whole machine and the Internet and other enterprises involved in the upstream chip field has become a new feature of industrial development.In order to maintain comprehensive competitive strength, terminal enterprises realize the differentiation and systematic advantages of the whole machine products by using customized chip products.After apple, Google, amazon, Facebook, tesla and other application companies have entered the field of semiconductor, self-developed or jointly developed chip products.

Fifth, the global main countries and regions around the chip competition intensified.The United States, Europe, Japan, South Korea and other semiconductor manufacturing powers/regions issued relevant policies to accelerate the layout of the semiconductor industry, further strengthen government support for the industry, and consolidate first-mover advantage and competitive position.In July 2016, innovation UK technology strategy committee established the "compound semiconductor application innovation research center".In 2016, samsung and hynix jointly established the semiconductor hope fund with a total scale of over 200 billion won.In 2017, the United States released the report "continue to consolidate the leading position of the semiconductor industry in the United States".Recently, DARPA proposed the electronic Renaissance program, which plans to spend more than $2 billion over the next five years to organize the development of new materials for electronic devices and to develop new architectures that integrate electronic devices into complex circuits.

Overview of semiconductor industry development in major countries and regions around the world

Us: dominant position in global market

The U.S. semiconductor industry has been a global leader since 1959, when americans kilby and noyce invented the first integrated circuit.In the 1980s, American semiconductor manufacturers lost some market share in the face of the technology transfer trend of the global semiconductor industry and the competition from Japanese semiconductor companies.However, with the major structural adjustment of the semiconductor industry in the United States from process-based to design-based, some enterprises represented by Intel took the initiative to abandon the memory market and began to vigorously develop microprocessors, prompting the United States to regain the world semiconductor hegemony.

The semiconductor industry has brought sustained and stable economic benefits to the United States and created more than 1 million American jobs.In addition, from the comparison of the size of the semiconductor market in the United States and the world, it can be seen that the semiconductor industry in the United States occupies a pivotal position in the global market, and its industrial performance is directly reflected as the "barometer" of the global semiconductor market, which comprehensively affects the global semiconductor market situation.In addition to the advantages of industrial scale, the semiconductor industry in the United States also has a dominant position in the competitiveness of enterprises.

Europe: develop market and technical advantages in specific areas

Since 1987, Europe's "big three" have almost never fallen out of the top 20 global semiconductor companies.Meanwhile, philips semiconductor of the Netherlands and Siemens semiconductor of Germany were separated from their original companies and developed into NXP and Infineon respectively, while SGS-Thomson was renamed as ST.In the past 30 years, relying on the traditional advantages of European semiconductor industry in mechanical engineering and automobile industry, European semiconductor manufacturers have made a series of strategic adjustments and voluntarily abandoned some businesses, and then focused on market segments and formed huge market and technological advantages in specific fields.In addition, equipment giants ASML and ASM and IP giant ARM are also important members of the European semiconductor industry.

Europe is an important part of the global semiconductor industry, with sales of semiconductors reaching $43 billion in 2018, up 12.1 percent from $38.3 billion in 2017.The main driver of strong growth in Europe in 2018 was rapid growth in memory, logic chips, analog chips and discrete devices.

Japan: products and market segments show steady growth

In the 1980s, Japan briefly overtook the United States as the world's largest semiconductor market share.With the growth trend of the global semiconductor market, the size of the Japanese semiconductor market exceeded $40 billion again in 2018 after six years, with a growth rate of 9.3%, maintaining growth for three consecutive years.

Products and market segments show steady growth.Memory chips grew fastest to a record 40.3 per cent, helped by strong demand in consumer electronics and cars.MPU chips grew next, at 21.4 percent.MOSdram grew 19.5 per cent, helped by strong demand from cars and industry.

South Korea: gradually narrowing the gap with advanced countries

In the 1980s, with the backing of the south Korean government, the chaebol -- samsung, LG, hyundai (spun off as hynix in 2001) and daewoo (which went bust during the Asian financial crisis in 1997) -- began to make inroad into the semiconductor industry.Seizing the huge gap in memory demand in the high-speed development period of PC era and mobile communication era, South Korea promoted the establishment of a national project research group similar to Japan's VLSI, and gradually narrowed the gap with advanced countries by completing the learning process through technology introduction, imitation and innovation.

In 2018, the size of the south Korean market reached us $114.7 billion, up 24.3% year-on-year.The market is dominated by memory products, valued at $101.6 billion.Sales in South Korea in 2018 were mainly driven by big data, high-end phones and high-capacity memory.

China: maintain the momentum of rapid development

Driven by a series of favorable factors such as policy support, high investment, engineer bonus and rapid growth of domestic demand, China's semiconductor industry has maintained a rapid development momentum.In some segments, such as smart card chip, communication chip, mobile intelligent terminal chip design, the product technology and quality of Chinese enterprises can match the world's advanced level.However, in the field of high-end general chip, such as CPU, DsP, FPGA, memory and analog chip, there is still a big gap between Chinese enterprises and global leaders in r&d, design and manufacturing.

In 2018, China's semiconductor sales reached $242.2 billion, up 14.0% from $212.4 billion in 2017.In the terminal sector, the main driver of China's strong market growth in 2018 was network communications, accounting for 31.3% of the total, followed by computers, accounting for 27%.From 2017 to 2018, all the major terminal application fields saw year-on-year growth of 11% to 15%.