(Original title: Lookout | The collapse of six tens of billions of projects, "China Core" encounters an unfinished tide)

◆ "Some local governments have limited perspectives on the development of high-end industries, and lack the professional ability to judge industry prospects and team strengths, which can easily be taken advantage of."

◆ Some industries aim at government funds, land and other resources, and deal with many places to increase prices; some industries have a tall package, but in fact they lack core technology and the team is incomplete

◆ In the first half of 2020 alone, nearly 20 places in China have signed or started construction of compound semiconductor projects, with a total planned investment of more than 60 billion yuan. The sustainability of these projects has caused industry concerns

In just over a year, six large-scale semiconductor projects with tens of billions in five provinces including Jiangsu, Sichuan, Hubei, Guizhou, and Shaanxi have been shut down successively. The industry is concerned that the core manufacturing fever has triggered a wave of unfinished products and caused state-owned assets. Losses, delay the development of the chip industry is a great opportunity.

A reporter from "Liaowang" News Weekly visited the site recently and found that various localities are working hard to revitalize the shutdown projects and minimize losses. However, due to complex issues involving multi-party cooperation and other aspects, some projects are difficult to restart and the disposal is not smooth.

Insiders in the semiconductor shutdown project reflect that the semiconductor industry has large investments, long cycles, and high risks, and China has a late start in this field and a weak foundation. It is understandable that some projects have been shut down due to uncontrollable factors. However, behind some seemingly individual cases of shutdown projects, all kinds of blind impulses that violate the development law of the semiconductor industry are worthy of vigilance. Some local governments either lack professional research and judgment capabilities, or are driven by distorted views on political achievements, and their reckless intervention in the industry and harming the industry are worthy of reflection.

Star project people go to the building empty

Coremaking heat triggers unfinished tide

The factory area is overgrown with weeds, the plant is still in an unfinished state, and the office space is already empty. The reporter recently came to Dekema (Nanjing) Semiconductor Technology Co., Ltd. (hereinafter referred to as "Nanjing Deke" in Nanjing Economic and Technological Development Zone). Code”), this “star company”, which is comparable to Nanjing TSMC’s planned investment of US$3 billion, has now been reduced to a semi-lamented subproject with arrears of wages, engineering payments, and loans.

The company was established in December 2015 and plans to produce power management chips, micro-electromechanical system chips, etc. The first phase plans to invest 2.5 billion yuan, but the actual capital of the project is only 250 million yuan. Later due to changes in shareholder conditions, this part The equity of the investment is taken over by the platform of Nanjing Economic and Technological Development Zone.

The government platform of the “shareholder” also does not want the project to be unfinished, and does everything possible to find investors. However, due to the large demand for funds, the complexity of multi-party cooperation in links such as intellectual property rights, technology transfer, and the legacy of the Nanjing Dekema project Concerns about the problem, there is still no suitable investor.

Li Ruiwei, the legal representative of Nanjing Dekema, has been hard to find in the name of "searching for investors". He has repeatedly ignored court summons and failed to appear in court as a person to be enforced. He has been restricted from high consumption and restricted from leaving the country.

▲ Weeds grow on the inside and outside of the Nanjing Dekema project in the Nanjing Economic and Technological Development Zone. The reporter looked inward from the iron fence, and the plant was still in an unfinished state. Photo by Pan Ye/this publication

The reporter found out that in the past year or so, there have been frequent unfinished incidents of semiconductor projects. Only six major projects with planned investment reaching the level of 10 billion involve five provinces in my country's southeast coastal, central, southwest and northwest regions.

In Chengdu High-tech Zone, Sichuan, GlobalFoundries (Chengdu) Integrated Circuit Manufacturing Co., Ltd. (hereinafter referred to as “Chengdu GlobalFoundries”) has ceased operations. The plant covering an area of ​​700 or 800 acres is surrounded by several kilometers of green steel mesh, except for the entrance A security guard was on duty outside, and the factory was empty. The company was established in 2017 by GlobalFoundries, an American chip foundry company, and the Chengdu municipal government with a planned investment of 9.053 billion U.S. dollars. At that time, it was known as the "Global Foundry's largest and most technologically advanced production base in the world."

In Fengxi New City, Xixian New District, Shaanxi, Shaanxi Kuntong Semiconductor Technology Co., Ltd. (hereinafter referred to as "Shaanxi Kuntong"), which is planned to cover an area of ​​approximately 2,000 acres, is in trouble, and core executives have resigned. The company was established in 2018 and originally planned to build a sixth-generation flexible screen production line.

In Huaian, Jiangsu, the local key project Dehuai Semiconductor Co., Ltd. has been unable to start construction. When the company was founded in 2016, it planned to invest a total of 45 billion yuan. In 2018, it announced that "the first phase of the Dehuai Semiconductor Project was officially put into production". At the end of 2019, employees began to seek salaries through the governor's mailbox and lawsuits. At present, the company is in a "half-stop" state, and local government departments have established relevant working groups to intervene in the company to promote related revitalization.

In Gui'an New District, Guizhou, the former "star enterprise" Guizhou Huaxintong Semiconductor Technology Co., Ltd. (hereinafter referred to as "Huaxintong") is still in bankruptcy and liquidation. In 2016, the Guizhou Provincial Government targeted server processors (CPUs) that have extremely high industrial ecological requirements, and invested billions of dollars in cooperation with Qualcomm of the United States to form Huaxintong. Three years later, Huaxintong was unsustainable commercially and announced the closure.

In Hubei Wuhan Airport Economic and Technological Development Zone, Wuhan Hongxin Semiconductor Manufacturing Co., Ltd., with a planned total investment of up to 128 billion yuan, is struggling and is on the verge of bankruptcy. In December 2019, the company held a grand ceremony for the first high-end lithography machine to enter the factory. Today, this "new and unused" lithography machine has been mortgaged to the bank.

0 yuan major shareholders play with empty gloves

The attractive prospects of the semiconductor industry have sparked enthusiasm for investment and construction everywhere. The reporter learned that some local governments have invested a lot of money in the above-mentioned shutdown projects through investment funds and other means-some invested tens of millions of yuan in research and development funds, some spent hundreds of millions of yuan to purchase technology licenses, and some were building factories, A total of several billion yuan was spent on wages, purchases of technical licenses, etc.

Some major industrial shareholders who should have led the investment either made "0" capital contributions, or contributed very little, or recovered their capital in disguise in various hidden ways, such as charging huge technology licensing fees.

What is more noteworthy is that such a huge investment has not brought about a breakthrough in the "stuck neck" problem, and some are just repeated capacity construction.

As of the shutdown, the main operating body of Chengdu GF is only a chip foundry with a manufacturing process of 180 nanometers and 130 nanometers. This plant received technology and old equipment from the US GlobalFoundries plant in Singapore.

When Huaxintong invested in server processors in 2016, my country already had nationally deployed research projects in this field and achieved results.

Shaanxi-kun with plans to enter the field of flexible screen in 2018, when domestic enterprises Jingdong party and Cigna has achieved the sixth-generation panel production line of flexible production.

The shutdown of the project also brings loss of talent. The technical teams for these large projects range from hundreds to thousands of people. Among them are experienced and mature talents as well as outstanding graduates in semiconductors and related majors.

The person in charge of a company who had employees who were taken from a suspended project told reporters that China’s semiconductor industry is already in short supply. Many talents who have been taken away from a suspended project have experienced two or three years or even more wasting, and it is difficult to keep up with the original team’s skills. Development has become a direct loss to the industry.

Difficult to activate

Industry confidence hits hard

An investment promotion cadre who took over one of the closed projects said, “We have done everything possible to help the project find investors. We have successively contacted more than a dozen strategic investors and financial investors in more than a year, but the demand for funds is large. It also needs to balance the demands and interests of all parties. Few projects can be negotiated."

“There are no bank deposits, vehicles, real estate, etc. available for execution in the name of the person subject to execution.” The People’s Court of Qixia District, Nanjing City evaluated the asset value of the Nanjing Dekema Project and held that the person subject to execution did not pay the corresponding project funds. The plant under construction has not been completed, and this part has almost no disposal value.

According to the court's feedback, Nanjing Dekema has 54 labor dispute cases, 1 construction engineering case, and 1 other service case, with a total amount of more than 35 million yuan.

The reporter interviewed the local government where these shutdown projects are located and learned that although localities are working hard to revitalize the shutdown projects and minimize losses, most of these projects involve a series of complex issues, and the residual value is not high, making disposal difficult.

"Basically no other work is done, and the main energy is to do liquidation." An insider of Huaxintong said that the failure of the project was a blow to the development of the big data industry in Guizhou.

The government pays rashly

Chip false fire causes worry

"Guizhou was vigorously developing big data at the time, and some benchmarking projects were needed." Insiders reflected that the cooperation between Guizhou Province and Qualcomm in the construction of Huaxintong was "each one needs what it needs."

Huaxintong’s office building has a magnificent appearance and covers an area of ​​nearly 10,000 square meters. It used to receive various visits from time to time. However, there is no production plant here from beginning to end. R&D and operations are located in Beijing and Shanghai.

"From the perspective of industrial foundation, economic strength, human resources and other factors, Guizhou has a higher threshold for server processors." An insider said that the project is unsustainable for many reasons, not only due to the impact of Qualcomm, but also Related to the market promotion of chips and the rate of return on investment, the leap-forward business model has a greater risk.

▲ Huaxintong's office building has a magnificent appearance and covers an area of ​​nearly 10,000 square meters. It is particularly conspicuous in the surrounding simple buildings. Photo by Xiang Dingjie/This publication

　Even local governments have been taken advantage of because of their lack of understanding of the industry.

"Many similar projects require the government to have zero land prices, build factories on behalf of others, and a large number of awards and subsidies. We believe that the requirements of this project are not too demanding, and it can also drive upstream and downstream industries. I did not expect that the industry’s capital, technology, and team have problems. ."

A person in charge of a local government who introduced the aforementioned shutdown project said, “Some local governments have limited perspectives on the development of high-end industries, and lack the professional ability to judge industry prospects and team strengths, which can easily be taken advantage of.”

Due to the weak foundation of my country's semiconductor industry, under the background of vigorously developing the semiconductor industry in various places, industries with technological advantages have become scarce resources. A government investment promotion officer told reporters that some industries are targeting government funds, land and other resources, and they are dealing with multiple places to increase prices; some industries have a tall package, but in fact they lack core technology and an incomplete team. It is easy to be deceived if some local governments intervene recklessly in the industry.

Will the suspension of major projects make government officials calmer in terms of industrial investment? The reporter asked a person in charge of a local investment project investment company. He said: "Some of the local government officials I have contacted are very confident. Generally speaking, they are more careful than before, but they still cannot be called professionally rational."

According to the company's data, the number of chip-related companies in my country has grown rapidly in the first half of this year. As of July 20, there were 45,300 chip-related companies in my country. In the second quarter of this year alone, there were 4,600 newly registered companies, a year-on-year increase of 207% and a month-on-month increase of 130%.

Zhu Jing, deputy secretary-general of the Beijing Semiconductor Industry Association, introduced that the semiconductor industry has attracted the participation of many domestic companies. In some subdivisions, there are even nearly a hundred companies competing together. Nevertheless, the gross profit margin of these companies is far below the international level, and most of the high-end markets in this field also rely on the supply of international companies.

Zhu Jing said that from the perspective of specific projects, following the clustering of large projects in the field of large silicon wafers a few years ago, similar situations have emerged in fields such as compound semiconductors. In the first half of 2020 alone, nearly 20 places in China have signed or started construction of compound semiconductor projects, with a total planned investment of more than 60 billion yuan. Moreover, 80% of these projects have landed in second- and third-tier or even fourth-tier cities in China, generally in areas where the semiconductor industry has a weak foundation and no relevant project construction experience. The sustainability of these projects has once again aroused industry concerns.

Strengthen the overall layout

Tackling the "stuck neck" problem

Interviewed industry professionals said that the semiconductor industry cannot do without the support of government departments. Many successful projects have local governments behind them. However, the professionalism of the semiconductor industry also places higher requirements on the level of investment decision-making by local governments.

The reporter combed and found that in recent years, some government departments have helped "China Chip" to break through the "stuck neck" problem and have achieved initial results.

In the manufacturing field, SMIC launched on the Sci-tech Innovation Board in July this year. Its 14-nanometer process chip foundry technology represents the most advanced level of independent research and development of integrated circuits in mainland China; Yangtze River Storage announced the successful development of 128-layer QLC3D in April this year NAND flash memory chips have achieved the leap from 32-layer to 64-layer to 128-layer in just 3 years; Changxin Storage’s dynamic random memory chip is in the stage of increasing production capacity, and domestic memory sticks equipped with this chip will be available as soon as they are on the market. Touted. In addition, Cambrian, BGI, Shanghai Microelectronics, Jiangfeng Electronics and other companies have made progress in various fields such as chip design, design tools, equipment and materials.

How can local governments help the "China Chip" rebirth?

Government officials in many places said that first, there is a good political ecological environment. The growth cycle of large semiconductor projects is very long, and it takes at least ten years from formation to profitability. This requires local governments not to toss or argue, one after another, to ensure the continuity of the project and industrial development.

The second is to have a team of professional cadres who understand the laws of the industry and dare to make scientific plans. The semiconductor industry is highly specialized. A professional and daring team of cadres can choose different investment fields in the process of planning the industry, adhere to market-oriented operations, and borrow wisdom from capital, experts, scholars and leading companies. To realize the benign interaction and steady operation of the government, experts, enterprises, and market parties.

In addition, semiconductors are a highly globalized industry. Most domestic semiconductor projects are jointly organized by talent teams from home and abroad. International cooperation is also inseparable in terms of technology, supply chain, and markets . Local governments that invest in projects need to be familiar with the industry. The international rules for investment and business operations prevent compliance risks from legal aspects.

Industry insiders also suggested that the country strengthen the overall layout of the semiconductor industry, concentrate its strengths on breakthroughs in key core technology areas, and focus on supporting semiconductor projects that have already passed technical and mass production difficulties to become bigger and stronger. LW