Summary of Major Events in the Semiconductor Industry in 2020

January

·   At the beginning of 2020, the global outbreak of the COVID-19 pandemic plunged various industries into a slump, including the semiconductor industry. The entire sector was shrouded in a depressing gray veil.

·   In January, Gartner released the 2019 global semiconductor revenue rankings, with the top three being Intel, Samsung, and SK Hynix. Global semiconductor revenue in 2019 totaled $418.3 billion, a year-on-year decline of 11.9%.

February

·   The domestic semiconductor market still holds vast growth potential, with the market generally optimistic about SMIC and Hua Hong Semiconductor. After years of development, these two semiconductor companies have become industry leaders in China. How to enhance China's semiconductor manufacturing capabilities and "reduce dependence on the U.S." has become an urgent issue for the country.

·   The COVID-19 outbreak escalated in Japan and South Korea, both key regions for semiconductor manufacturing. Samsung and SK Hynix reported confirmed cases among employees, but production lines were not severely impacted.

March

·   With the construction of new infrastructure such as 5G in China, 5G chip technology and production capacity saw significant improvements. As a result, third-generation semiconductors, as a critical technology, received unprecedented attention. Third-generation semiconductor materials can meet modern demands for high temperature, high power, high voltage, high frequency, and radiation resistance. They also offer economic and environmental benefits such as smaller size, lower pollution, and reduced operational losses, making them a growing focus of development.

·   Xinyuanji Semiconductor achieved a major breakthrough in the field of third-generation semiconductor material "gallium nitride" (GaN), which can be used in the fabrication of power electronic devices and microwave RF devices.

April

·   Domestic semiconductor manufacturing gradually resumed full production capacity, and the industry began to see light at the end of the tunnel.

·   Multiple semiconductor companies released their Q1 reports, all showing revenue growth. According to an analysis by Founder Securities, the semiconductor industry is divided into three tiers based on technological level, global competitiveness, and localization progress:

Tier 1: Targets, packaging substrates, CMP polishing materials, wet electronic chemicals, and some packaging materials.

Tier 2: Silicon wafers, electronic gases, compound semiconductors, and photomasks.

Tier 3: Photoresists.

May

·   SMIC received investments from two national-level funds: the National Integrated Circuit Fund II and the Shanghai Integrated Circuit Fund II, injecting $1.5 billion and $750 million respectively, totaling approximately RMB 16 billion. These funds will be used for the mass production of 14nm and below chips at SMIC South.

·   Hisilicon's sales revenue increased by 54% year-on-year, up by $935 million from the previous quarter to $2.67 billion, marking Hisilicon's first entry into the global semiconductor TOP 10 list.

·   TSMC invested $12 billion to build a chip factory in Arizona, USA. The factory will create 1,600 jobs and produce the most advanced 5nm chips.

June

·   At the 25th working meeting of the China Securities Regulatory Commission's M&A Committee in 2020, Wingtech Technology's acquisition of the remaining stake in Nexperia was unconditionally approved. This acquisition is the largest semiconductor deal in A-share history.

·   TSMC announced it would begin trial production of 3nm chips in 2021, with mass production planned for 2022. The company also plans to increase R&D investment and purchase two advanced EUV lithography machines to accelerate the development of 2nm chips.

July

·   India decided to exclude Huawei from its 5G network construction plan. In the same month, the UK also officially announced it would stop using Huawei equipment in 5G construction.

·   NVIDIA's stock price rose, pushing its market capitalization to approximately $251.314 billion, surpassing Intel for the first time to become the most valuable U.S. chip company.

·   U.S. analog chip giant Analog Devices (ADI) successfully acquired its competitor Maxim Integrated.

·   SMIC was listed on the STAR Market of the Shanghai Stock Exchange on July 16! The issue price was RMB 27.46 per share, with an opening price of RMB 95 per share, a total share capital of 7.13642 billion shares, a P/E ratio of 109.25, and a surge of over 246% on its first trading day.

August

·   The state issued the "Policies for Promoting the High-Quality Development of the Integrated Circuit and Software Industries in the New Era," outlining eight policy measures including fiscal and taxation, investment and financing, R&D, import/export, talent, intellectual property, market application, and international cooperation.

·   At the China Information 100 Forum, Yu Chengdong, CEO of Huawei's Consumer Business Group, stated that production of Huawei's Kirin chips would cease on September 15.

·   SMIC's 14nm process entered mass production, with yields steadily improving.

·   At the end of August, Japanese Prime Minister Shinzo Abe resigned due to health reasons. During his tenure, Abe had a significant impact on Japan's semiconductor industry.

September

·   TSMC will collaborate with six universities in Taiwan to launch the "TSMC Semiconductor Program."

·   NVIDIA released its RTX 30 series graphics cards at the beginning of the month. Later that month, NVIDIA acquired ARM (excluding its IoT services division) from SoftBank for $40 billion (approximately RMB 273.3 billion).

·   The U.S. plans to remove Huawei and ZTE equipment, with the FCC estimating that replacement or removal would cost approximately $1.837 billion.

October

·   China's first chip university, the "Nanjing Integrated Circuit University," was officially established. This special "school," initiated by the government, primarily recruits senior undergraduates and graduate students with employment needs, aiming to cultivate professional integrated circuit talent in China.

·   Meng Wei, spokesperson for the National Development and Reform Commission, responded at a regular press conference to the issue of stalled chip projects, stating: "Some localities lack a sufficient understanding of the development laws of the integrated circuit industry, leading to blind project launches and risks of low-level redundant construction. In some cases, projects have stalled or factories have remained idle, resulting in resource waste."

·   Huawei officially launched the Mate40, the company's first model equipped with a 5nm chip, the "Kirin 9000."

·   Semiconductor giant AMD officially announced that it had reached a final agreement to acquire FPGA chip leader Xilinx in an all-stock transaction valued at $35 billion.

November

·   Biden won the U.S. presidential election, defeating Trump, whose administration had imposed severe restrictions on China's semiconductor industry. As a result, TSMC could no longer manufacture advanced chips for Huawei's Hisilicon.

·   Huawei officially sold its Honor brand for RMB 100 billion.

·   Intel announced the acquisition of SigOpt, a San Francisco-based startup specializing in optimization platforms for modeling and simulation. The company's technology is expected to help advance Intel's AI chip business.

December

·   The U.S. Department of Commerce added 59 Chinese companies, including SMIC, China's largest chip manufacturer, to the "Entity List," imposing export restrictions to the U.S. SMIC responded that the restrictions would not have a significant adverse impact on its short-term operations or financial condition, but would have a significant adverse impact on the R&D and capacity construction of advanced processes at 10nm and below.

·   China currently has approximately 244,000 chip-related enterprises. Over 85% of these are distributed in information transmission, software and IT services, wholesale and retail, and scientific research and technical services. Among them, more than 20,000 chip-related enterprises hold patents.