In 2018, the annual growth rate of semiconductor output value is about 5% to 8%, reaching a new high. It is expected to continue to increase in 2019, and the output value will stand at the $500 billion mark for the first time. Compared with 2017, the growth will slow down, reaching 7.5% in 2018, and the growth will be flat in 2019-2020. So what is the development trend of the semiconductor industry? Through the analysis of the semiconductor industry market, it is known that with the continuous development of China's economy, the demand of China's semiconductor downstream market has been maintaining a rapid development momentum.

 

In 2008, China's semiconductor market demand was only 103.9 billion US dollars, accounting for the global semiconductor market demand

 

By 2015, China's semiconductor market demand has increased to US $1958 billion, accounting for more than 60% of the global semiconductor market. At the same time, the import volume of semiconductors also increased rapidly, mainly the import of integrated circuit products. In 2017, China imported 377 billion pieces of integrated circuits, with an import value of US $260.1 billion and an export value of US $66.9 billion, but only a quarter of the import value. Integrated circuits surpassed crude oil and became the largest import product. There is a huge trade deficit in the field of integrated circuits, which is mainly due to the great demand for semiconductors in China. However, the development of domestic semiconductor enterprises is relatively late, and there is a big gap between the technical level and the well-known foreign manufacturers.

 

Under the promotion of the national integrated circuit industry development promotion program and the national integrated circuit industry investment fund, China's semiconductor market has become a global growth engine, with sales exceeding 430 billion yuan in 2016, with a growth rate of 19%. Under the pattern of coordinated development of domestic design, manufacturing and packaging and testing, the growth rate of domestic semiconductor industry is expected to be 18% - 25% in 2017. In the past two years, the amount of international M & A led by Chinese capital has reached 13 billion US dollars, which has attracted the attention of the United States and other western countries, and more stringent examination has been taken against the merger and acquisition of Chinese enterprises. In 2017, how to integrate the existing external resources will become a more serious challenge for domestic enterprises.

 

It is estimated that about 62 semiconductor Fabs will be put into operation from 2017 to 2020, of which 26 are located in China, accounting for 42% of the total number in the world. Six of these Fabs built in China are expected to be put into operation in 2017. For this production capacity, not only in the number of manufacturing production lines increased significantly, but also with advanced technology. It can be expected that after the current round of investment, the Chinese mainland manufacturers will have more intense competition with the international factories in the advanced technology field. In addition, in the field of memory, at present, a strategic pattern of tripartite confrontation is being formed in China, represented by Wuhan Xinxin, Fujian Jinhua and Hefei Changxin. The industrial layout has been initially completed in 2016. In 2017, with the continuous advancement of the three major projects, it is expected that there will be breakthroughs in both the technical level and the production line construction level.

 

With the enhancement of comprehensive national strength and the rapid development of semiconductor industry, China has started a new round of semiconductor development boom driven by demand. The overseas investment and M & A activities of Chinese capital have aroused the vigilance of the United States, Europe, Japan, South Korea and other countries. According to a recent report issued by the U.S. Council of scientific and technological advisors (PCAST), the rise of China's semiconductor industry has posed a threat to the United States, and will strengthen the Cfius review of Chinese acquisitions. Germany and other EU countries have also strengthened the examination of foreign investment, especially the merger and acquisition of Chinese enterprises in Europe. The South Korean government supports Samsung Electronics and SK Hynix to take the lead in building a semiconductor Hope fund with a total scale of 200 billion won to cope with the rise of China's memory industry. The competition of global semiconductor industry around capital, technology, talent and market is increasing.

 

In the face of increasingly complex international politics and M & A environment, on the one hand, it is expected that the trend of overseas M & A of domestic capital will slow down in 2017 and the M & A will be more difficult. In 2016, the total amount of domestic M & a decreased significantly year on year, and there was basically no M & A of the whole company, all of which were mergers and acquisitions of product lines or part of equity of foreign companies. There were 7 cases of blocked reviews. With the global industrial integration and intensified competition, the choice of M & A targets is gradually decreasing, and the difficulty of domestic capital overseas M & A continues to increase.

 

Through a simple analysis of the development trend of the semiconductor industry, we know that on the other hand, local IC investment continues to heat up, and there are more forms of cooperation between domestic and international companies. With the establishment and operation of national funds and the implementation of various policies, local governments are enthusiastic. In recent two years, local funds for integrated circuits have been set up in Beijing, Wuhan, Shanghai, Sichuan and other places. In 2017, the local investment in the IC industry will continue. All localities will accelerate investment in production lines, industrial parks and public service platforms, and provide relevant policy support. We should focus on the integration of upstream and downstream industries, and build an ecological platform for domestic enterprises. At the same time, from overseas M & A began to shift to various forms of cooperation, such as the establishment of joint ventures between international enterprises and domestic enterprises, and the search for opportunities for high-quality product line spillover after the integration of international giants.