The Rise of China's Semiconductor Industry: How to Seize Opportunities and Break through Bottlenecks?

Release Date:2024-11-21

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In the global semiconductor industry, China is rising at an astonishing speed and has become a force that cannot be ignored. However, facing challenges such as technological blockades and market barriers, how can China's semiconductor industry achieve the leap from "big" to "strong"? International cooperation, this keyword may be the key to solving the mystery. This article will explore the international cooperation path of China's semiconductor industry, analyze its main export markets, and how foreign trade companies should prepare to meet this historic opportunity.

1. Importance of the semiconductor industry and product application characteristics

The semiconductor industry occupies a pivotal position in today's science and technology field and can be regarded as the cornerstone of modern industry. However, semiconductor components themselves do not have direct use value, and the realization of their value depends on the deep integration with terminal products. For example, CPU and DRAM are the core components of computer operation. They play a key role in the terminal product of computer and are responsible for data processing and storage; CMOS Image Sensor is an indispensable part of the imaging function of digital cameras and smartphones, converting light signals into electronic signals to realize the shooting function. Looking back on the development history of the semiconductor industry, we can clearly see that the formation of a benign interaction between semiconductors and terminal products is the most ideal development model. When semiconductor products are constantly upgraded in technology, terminal products can also be updated accordingly. The two promote each other and jointly promote the advancement of science and technology. This interactive model is particularly evident in the development of Japan's semiconductor industry, and the leading role of applications in the semiconductor industry has been fully reflected in Japan.

2. The application of semiconductor industry from the perspective of Japan’s development

In the 1950s and 1960s, the semiconductor industry was mainly centered on the application of transistors. At that time, Japan's radio and electronic calculator industries were booming, and these two fields became the main application markets for transistors. In the 1970s, Japanese electronic calculator companies emerged like mushrooms after rain, with a number of hundreds. After fierce market competition, by the 1990s, only three companies remained: Sharp, Canon and Casio. It is worth mentioning that the world's first processor 4004 developed by Intel was born in response to the needs of Japan's Busicom electronic calculator company. This event fully demonstrated the driving role of applications in semiconductor research and development. Although Japan's semiconductor industry has gradually weakened since the 1990s, it still maintains strong competitiveness in some segments. For example, Sony's CMOS Image Sensor has been in a leading position in the past few decades with the strong support of Japan's camera industry. As Japanese camera companies and integrated electrical companies have fully entered the field of digital cameras, occupying more than 90% of the global market share, the pixels of CMOS Image Sensors have been continuously improved, and the image quality of digital cameras has also been getting better and better. In addition, Japan's power semiconductor field has also performed well. Toshiba, Mitsubishi Electric, Fuji Electric, Rohm and other companies have long been ranked among the top ten power semiconductor companies in the world. This is due to Japan's strong strength in the field of electromechanical products, and there is a sustained strong demand for power semiconductors. For example, Japan is the first country in the world to apply IGBT to trains, and Toshiba is the first company in the world to launch variable-frequency air conditioners, and the key to achieving variable-frequency functions is power semiconductors. We can also observe similar phenomena in other countries. As an industrial power, Germany lags behind the United States and Japan in the field of semiconductors as a whole, but in the field of power semiconductors, Infineon (independent from Siemens' semiconductor department) has always been in a leading position in the world, which is closely related to Germany's high demand for power components in the field of electromechanical products. As the world's number one semiconductor power, the United States' initial development of its semiconductor industry mainly benefited from the huge demand of the military industry, and later relied on the computer industry. Now the artificial intelligence industry has become the main driving force.

3. Electric vehicles and carbon neutrality: opportunities for China’s semiconductor industry

At present, the world is experiencing a wave of the fourth industrial revolution, with digital transformation (DX) and low-carbon transformation (GX) as its core features. In this revolution, artificial intelligence will become the core of DX, while the energy revolution of renewable energy replacing traditional fossil energy is the key to GX. This industrial revolution kicked off around 2020, with landmark events including the birth of ChatGPT and the carbon neutrality goals announced by various countries under the framework of the Paris Agreement. In September 2020, China set the ambitious goals of carbon peak in 2030 and carbon neutrality in 2060. Electric vehicles are undoubtedly the most representative industrial products in the fourth industrial revolution. The automotive industry is undergoing a major change that has not been seen in a century, transforming from traditional mechanical products to smart electronic products with wheels. High-end electric vehicles have a huge demand for semiconductor components, about 1,000, and automotive-grade chips have higher reliability requirements than electronic-grade chips, which puts higher demands on the semiconductor industry.

In the field of artificial intelligence, China is currently slightly behind the United States, but in the field of carbon neutrality, China is in the first camp in the world in the first round of competition. This is mainly due to China's relative advantages in relatively mature industries such as photovoltaics, wind power, hydropower, and lithium batteries. The types of semiconductor components required for a high-end electric car cover almost all current types, and China is already in the forefront in the field of electric vehicles. This provides China's semiconductor industry with unprecedented opportunities to catch up, especially in power semiconductors and third- and fourth-generation semiconductor materials. The promotion of carbon neutrality will strongly promote the development of power semiconductors, because in the process of energy transformation, core equipment such as inverters required for photovoltaic power generation and electric vehicle charging piles cannot do without power semiconductors. At present, countries are actively carrying out the research and development and application of third- and fourth-generation semiconductor materials (such as silicon carbide, gallium nitride, gallium oxide, and diamond). These materials have significant advantages in withstanding higher voltages, currents, and reducing power losses. Some materials can also be used in radioactive scenes and space.

4. The key to the development of China's semiconductor industry: basic research and technological breakthroughs

The chip problem has always been a "bottleneck" problem faced by China. Its essence is that some industrial technologies and production know-how have not yet been mastered, and the mastery of technology requires time and continuous efforts. If China is determined to become a leader in the semiconductor industry, it is far from enough to develop only within the existing ecosystem and technology system. It must make breakthroughs in basic research. In the past few decades, Moore's Law has promoted the rapid development of the semiconductor industry, but now it is approaching its limit. In the next few decades, artificial intelligence and its related chips will become the focus of global competition. Whether China can achieve breakthroughs in this field will directly determine the fate of China's semiconductor industry. Looking back at the friction between Japan and the United States in semiconductors, we once mistakenly believed that Japan surpassed the United States in semiconductor technology in the late 1980s. In fact, Japan surpassed the United States in its ability to manufacture high-quality industrial products, not in semiconductor technology itself, which is also an important reason why the United States was able to overtake later. After 2000, Japan has achieved fruitful results in scientific research, continuously won the Nobel Prize, and has strong mathematical research, but it is relatively backward in the Internet era and the era of artificial intelligence. The lack of basic research capabilities is an important factor. For example, since the establishment of the Turing Award in 1966, Japanese scientists have never won the award. This shows that if China wants to achieve long-term development in the semiconductor industry, it must attach importance to basic research, increase R&D investment, break through technological bottlenecks, and achieve the transformation from imitation to innovation. Only then can it occupy a place in the global semiconductor industry competition and truly realize the rise of the semiconductor industry.

5. China's semiconductor industry: the road to rise and international cooperation

The rise of China's semiconductor industry is the result of years of policy support and market-driven efforts. From raw material supply to chip design and manufacturing, and then to packaging and testing, China has built an ecosystem covering the entire industry chain. However, in the fields of high-end chip technology and core IP research and development, China still faces many challenges. At this time, international cooperation has become the key to breaking through bottlenecks and accelerating development.

Through technical cooperation, talent exchange, market expansion and other means with international advanced companies, Chinese semiconductor companies can not only quickly improve their own technological strength and market competitiveness, but also contribute Chinese wisdom and Chinese solutions to the innovation and development of the global semiconductor industry.

6. China’s major semiconductor export markets: diversification and globalization

With its cost-effectiveness and continuously improving technology, Chinese semiconductor products have been sold to many countries and regions around the world. The main export markets include:

United States: As one of the world's largest semiconductor markets, the United States' demand for Chinese semiconductor products continues to grow.
Europe: Europe has a large demand for Chinese semiconductor products in the fields of automotive electronics, industrial control, etc.
Southeast Asia: Southeast Asia is an important export market for China's semiconductor products, especially countries and regions with developed electronic manufacturing industries.
Japan, South Korea and other emerging markets, such as Africa, Latin America and other regions, also show strong demand for Chinese semiconductor products.

The diversification and global distribution of these markets provide broad development space for China's semiconductor industry.

VII. Preparation of foreign trade enterprises: meet challenges and seize opportunities

Faced with fierce competition in the global semiconductor market and ever-changing market demands, foreign trade companies should make the following preparations when exporting semiconductor products:

Gain in-depth understanding of the target market : Accurately grasp market demand and regulatory requirements through market research, participation in international exhibitions, etc.
Improve product quality and technical level : increase R&D investment, promote product technology upgrades, and meet high-end market demand.
Establish a stable supply chain system: Establish long-term cooperative relationships with suppliers to ensure the stability and reliability of raw material supply.
Strengthen brand building and market promotion: focus on brand building and market promotion to enhance brand awareness and reputation in the international market.
Cultivate an international talent team: recruit talents with international vision and professional skills, build an international team, and enhance cross-cultural communication capabilities.

8. Multilingual websites and overseas promotion: a powerful tool for expanding international markets

For foreign trade enterprises, building multilingual websites and conducting overseas promotion are the key to expanding international markets and enhancing brand competitiveness. Multilingual websites can break down language barriers and enable foreign trade websites to reach potential customers in more countries and regions. At the same time, overseas promotion can enhance the company's visibility in the international market and attract more potential customers to pay attention to and cooperate with them.

By building multilingual websites and conducting overseas promotion, foreign trade companies can:

Expand market coverage: Reach more potential customers and increase sales and market share.
Improve user experience: Allow users to understand product information and terms of service in a language they are familiar with, thereby increasing conversion rates and satisfaction.
Enhance brand image: Show the company's professionalism and international image, and improve brand recognition in the international market.
Optimize SEO: Improve your website's visibility in multiple language search engines, attract more traffic and potential customers.

IX. Conclusion: Work together to create a brilliant future for semiconductors

The future of China's semiconductor industry lies in cooperation, innovation and win-win. Only by embracing the world can we go further; only by working together can we become stronger. Let us make more international friends with a more open mind and a more positive attitude, deepen international cooperation in the semiconductor industry, and jointly write a glorious chapter for China's semiconductor industry!

Through the discussion in this article, it is not difficult to find that international cooperation is of vital significance to the development of China's semiconductor industry. Facing the opportunities and challenges of the global market, China's semiconductor industry should adhere to the principles of open cooperation, mutual benefit and win-win, actively seek cooperation and exchanges with international advanced companies, and jointly promote the prosperity and development of the global semiconductor industry.

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