The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

While Huawei was “stabbed” by the United States, the notebook computer industry was not doing well.

According to foreign media reports, sources in the industry chain revealed that the delivery time of notebook-related chips will be extended by 2-3 months. The reason for the delayed delivery of the chips was the tight production capacity, especially the tight production capacity of 8-inch wafers, which in turn affected the production and delivery of related chips for notebook computers.

As this year’s epidemic has led to a sharp increase in activities such as online office and online learning, the demand for laptop computers has increased significantly. If the epidemic continues to spread, the core-breaking storm will intensify.

1. The chip production capacity has been tight for a long time, and the industrial chain collectively “adds chaos”, and the situation is difficult to change in the short term

The current situation of chip supply interruption does not appear suddenly. “Intelligent Relativity” found that the global 8-inch wafer foundry capacity began to sell well as early as the second half of 2017. By mid-2018, according to Digitimes data, the capacity utilization rate of major foundries in Taiwan, China had climbed to 94.7%, and the global production capacity had approached 100% last year.

If we look at the upstream and downstream of its industrial chain, we can find that chip supply is almost inevitable, but the emergence of the epidemic has made the contradiction between supply and demand appear faster and more violently.

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

Downstream: 8-inch wafers have the best performance and price, and new downstream technologies still favor mature processes.

At present, there are three main types of wafers used in the industry: 6-inch, 8-inch, and 12-inch. Among them, 8-inch and 12-inch wafers have the largest application volume. 8-inch wafers have mature special processes, and 12-inch wafers have more technical requirements. High cost performance is not as high as 8-inch wafers. This is the main reason why downstream manufacturers still choose 8-inch wafers.

Secondly, not all new markets such as 5G and the Internet of Things that are currently fully rolled out require the most advanced 12-inch process. Many new technologies still use large-scale 8-inch products, such as MEMS sensors. The emergence of this situation aggravated the tension of 8-inch wafers. It’s like a certain main road is already jammed with cars, but the people behind continue to squeeze the nearest road without diverting traffic.

Midstream: IDM manufacturers have jumped and upgraded, and the foundry is difficult to expand, and the production capacity has been overloaded.

High-tech companies use the latest technology as their layout direction. In the process of shifting from 6 inches to 8 inches in recent years, some IDM manufacturers have skipped their main production capacity directly over the mature 8-inch wafer line and directly focus on 12-inch wafers. For production, they outsourced 8-inch products to foundries, causing the pressure to produce 8-inch wafers to further tilt to foundries.

For foundries, the high-tech threshold determines the industry’s highly concentrated market share, with the top 10 foundries occupying 96.7% of the foundry market.

On the one hand, there are few major production companies, and on the other, the production equipment cannot keep up. Since equipment suppliers no longer manufacture new equipment used in 8-inch wafer fabs, equipment for producing 8-inch wafers is extremely scarce, and only second-hand equipment can be circulated in the market. This has led to a downward trend in the total number of 8-inch fabs in the world. According to SEMI statistics, by the end of this year, there will be 189 8-inch fabs in the world, compared with 199 at the peak of 2007. .

Upstream: The world is divided into five parts, and the limited supply from upstream leads to frosty weather.

From last year’s data, the current upstream silicon wafer manufacturers present a pattern of five dominance, that is, an oligopoly. Under this circumstance, the market share is relatively fixed, and the competitive pressure of various companies is relatively small compared to perfect competition. You only need to focus on the situation of a few competitors. Therefore, all parties will not rashly adopt a radical expansion strategy, which has also led to relatively fixed production capacity of silicon wafer manufacturers in the upstream of the industry, so price increases and shortages of silicon wafers occur frequently.

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

It can be seen from the analysis of the overall industry chain that the tension on chips (especially 8-inch wafers) is difficult to reverse in the short term. The chip is the core of the information industry. Whoever masters the chip is in control of the lifeline of the development of the information industry. my country is a big manufacturing country and is moving towards a manufacturing powerhouse. Chips play a vital role in this transformation. High-tech companies (such as notebook computers) need to “eat” a large number of chips. my country’s chip imports have exceeded crude oil imports for many years and ranked first in terms of imports.

2. The United States is actively wooing industry giants, and the risks are increasing. How can the major mainland “chip-eaters” prepare?

The chip industry is called the “life-and-death industry” by the United States. China is currently the world’s largest chip consumer market, consuming about 70% of the world’s chips. In this Sino-US trade war, the “chip” as the first “killer” of the United States, instantly caught us by surprise.

1. The United States draws on TSMC and many other “little brothers” to form a “chip strategy” encirclement for my country

Because of our “chip shortage” weakness, the United States is ready to start from the foundry again this time, and wants to increase its “chip” suppression against China. On May 10, according to the Wall Street Journal, the Trump administration is discussing with chip manufacturers including Intel Corporation and TSMC to build factories in the United States. In addition, according to Dow Jones news, US officials are still considering helping South Korea’s Samsung Electronics expand its foundry manufacturing operations in the United States.

An Intel spokesperson said: “Intel is ready to cooperate with the US government to operate a US company and provide a wide range of secure microelectronics products.” A TSMC spokesperson said on May 12: “We are actively evaluating all suitable locations, including the United States, but there are no specific plans yet.”

In fact, the United States called TSMC to build a plant in the United States as early as October last year, but at the time TSMC chairman Liu Deyin pointed out that it would not consider setting up a plant in the United States in the short term, and there is no related acquisition plan. At that time, the Sino-US negotiations were the most stalemate, and the first phase of the economic and trade agreement has not been signed, so it is reasonable for TSMC to try to avoid becoming a pawn in the Sino-US game.

From the perspective of the foundry market, a TSMC company already has a share of more than 54.1%. As an excellent “businessman”, Trump will inevitably notice the importance of TSMC, and negotiation is nothing more than a matter of paying a bargaining chip. TSMC should also understand and take the opportunity to offer more favorable conditions to the US in this regard.

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

Recently, Taiwan independence forces have become more and more rampant, and Taiwan’s political system has tended to follow the United States. If this point is taken into consideration, the United States integrates its followers, and 8 of the world’s top ten foundries will be restricted by the United States. In mainland China, only SMIC and Hua Hong semiconductor are in the hands of their families, and their shares are relatively small.

The situation changed rapidly, and a major reversal occurred.

On May 14, according to Reuters news, Trump extended an executive order signed in May 2019 for one year, which declared a national emergency and prohibited U.S. companies from using telecommunications equipment made by companies that pose a national security risk. . On May 15th, three days ago, TSMC announced that it “has no plan to build a factory in the United States” and announced that it would invest 12 billion U.S. dollars to build a factory in the United States, and all sensitive components will be produced in the United States.

In the early morning of May 16, the U.S. Department of Commerce announced a new plan to amend export control regulations to completely restrict Huawei’s purchase of semiconductors produced using U.S. software and technology, including those outside the U.S. that are listed on the U.S. Commerce Control List. Production equipment requires a license from the U.S. government before producing chips for Huawei and HiSilicon.

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

Since then, the United States has formed a strategic encirclement of our chip. Once the friction between China and the United States and the cross-strait intensifies, the “chip-eating” notebook giants in the Mainland will inevitably be passive. Now, in the face of global chip supply cuts and the strategic suppression of the United States, where will the major “chip-eaters” in the Mainland go?

2. The mainland notebook giants are helpless, only Huawei and Xiaomi are in action

Among the companies producing notebooks in the mainland, Huawei, Lenovo, Asus, Xiaomi and other companies all rely on imported Intel and AMD for their notebook chips. Intel is the only one in this year’s chip ranking, and the top 50 chips have been rounded up by Intel and AMD.

The supply of notebook chips is cut off, Lenovo and Huawei are going to “get it with nothing”

Companies such as Lenovo and Asus have basically no autonomy, relying entirely on Intel and AMD for supplies, and have basically no attempts at self-developed chips. Maybe they think that such an attempt will not get the desired results, but will also arouse the “targeting” of the United States. It is better to continue to be a “obedient” “good boy”.

According to the report of the research organization, Lenovo still has 12.8 million shipments in the first quarter of 2020, ranking first. The huge sales volume also means that the chip is consumed very quickly. However, the current major “chip-eating” Lenovo can only act on the “face” of Intel. Since last year, Intel has stated that there is a shortage of chips and that it will increase its production capacity as soon as possible. However, from the upstream and downstream analysis of the industry chain, this is just Intel’s strategy of using “wangmei quenching thirst”.

Regarding Lenovo’s “such a field”, there have been controversies in the market regarding its chip strategy at that time. The head of Liu later talked about not investing in chips, explaining that it was not enough for private enterprises.

In the view of “Intelligent Relativity”, this thing is not right or wrong, but the structure is different. From the perspective of a smart businessman at the time, it was correct not to invest in chips, because it might take several years or ten years to see no effect. During this period, Lenovo may not be able to withdraw its capital due to continuous investment, causing business problems. This is a very risky behavior. But judging from an outstanding entrepreneurial pattern, Mr. Liu still lacks some courage and strategic vision when he did not invest in chips.

Huawei HiSilicon has been running with it for more than ten years, and finally the “spare tire” turned positive. BOE suffered losses for 14 consecutive years, and finally counterattacked to become the world’s number one. It is true that we can say that BOE’s success is the result of many years of government subsidies. However, China has been “lack of cores and screens” for a long time. If Lenovo is really willing to sink its heart and develop chips, the country will not fail to support it. According to statistics, Lenovo’s ten-year R&D expenditure is less than that of Huawei’s one year. If you don’t work hard, you can’t blame the country for not supporting it.

Perhaps some people are still immersed in the aura of “the world’s No. 1 sales”, but if Lenovo does not see the huge risks of grasping its core competitiveness in the hands of others, then the rapid decline of the Qing empire may be in Lenovo. Repeat it again.

In dealing with chip risks, Huawei’s operations seem to be more commendable. Although Huawei has not directly started the production of chips, it has gradually shifted the task of chip production to domestic enterprises. A few days ago, it was rumored that Huawei’s HiSilicon Kirin 710 processor chip switched from TSMC’s 12nm process to SMIC’s 14nm process, gradually reducing its reliance on TSMC.

At present, Huawei’s self-developed “Kirin” chip can be used in notebook computers, but because its architecture is AMD’s and cannot be integrated with the Windows system, it cannot Display its skills. Huawei’s chips are mainly produced by TSMC’s foundry. At present, Huawei’s “Kirin” The chip has not been successfully applied, and it has been cut off by the United States for production. It is really too difficult for Huawei.

And Xiaomi has also started to learn from Huawei’s research and development chips in 2014. Although only four chips used in other Electronic products have been made, and the performance is average, at least it has begun to pave the way for higher-end chips.

3. “The revolution has not yet succeeded, comrades still need to work hard.”

“The rise of the mainland semiconductor industry requires autonomy from design to foundry, packaging and testing. Therefore, it is an inevitable trend for mainland chip design companies to seek mainland foundry.” Guosen Securities pointed out that since the beginning of 2019, chip design giants and small and medium-sized companies have As far as possible, the foundry will be transferred to the country. This kind of foundry order transfer has gradually become the consensus of the industry, and the trend is strengthening.

The second phase of the National Integrated Circuit Industry Investment Fund Co., Ltd. was incorporated on October 22, 2019, with a registered capital of 20.415 billion yuan, and began substantial investment at the end of March this year. SMIC has established a semiconductor industry fund with the National Integrated Circuit Fund and other investments, the purpose of which is also to gradually open the siege of foreign chip strategies.

We cannot change the status quo of poor foundation and difficult tasks, but we think that New China also stood up from the “most dangerous” moment. In the face of difficulties and blindly follow the trend, how to create a “new era”? The people in China don’t want to see our notebook manufacturers and even companies in the chip industry just being content to be “good people” waiting for the “master” to give alms.

If Huawei’s creation of HiSilicon more than a decade ago is similar to the rebirth on a cruise ship in Jiaxing, Zhejiang in 1921, the conversion of HiSilicon’s spare tires last year was like a gunshot at the head of Nanchang in 1927. The road to “revolution” is still long, and “comrades” still need to work hard.

Perhaps one day in the future, we can see that Huawei’s chips are already running smoothly in the “Hongmeng” operating system developed by ourselves. Some of Xiaomi’s chips have been smoothly integrated with Huawei’s operating system, and Lenovo, Asus, etc. have also become “advanced elements.” “, in conjunction with other domestic chip companies to develop domestically-made chips suitable for them.

Summarize

In terms of the chip industry chain, the current shortage cannot be solved in the short term; and in the future, many “brothers” led by the United States have formed a strategic encirclement situation for us. What is even more worrying is that many “chip-eating” companies in the Mainland have long been firmly tied to the “enemy” blades and cannot move. The “warm water” for many years is about to boil. Will the “frogs” be able to make a last-ditch fight? Give time to answer. “Intelligent Relativity” only hopes that companies with “national hope” such as Huawei and Xiaomi can “fly over Luding Bridge” before the “enemy” seals the last pass.

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