Mobile chip multi-party "fire" Chinese market affects industry reshuffle

In the mobile phone market, every mobile phone sold by mobile phone manufacturers needs to pay the chip maker a patent fee of about 5% of the chip price. Unlike other chip vendors, Qualcomm's patent fees are charged at 5% of the total price of the machine. Taking the 3,000 yuan mobile phone as an example, Qualcomm has to charge a patent fee of 150 yuan, and its chip itself is only about 200 yuan. From 3G to 4G, the strong Qualcomm in the past few years, with a large patent licensing fee for many mobile terminal manufacturers including Chinese mobile phone manufacturers can not breathe.

The China Development and Reform Commission's anti-monopoly investigation of Qualcomm has been more than ten months, and it is still inconclusive. In this context, the Chinese chip market is quietly challenged from the policy level to Qualcomm's dominance. Recently led by the Ministry of Industry and Information Technology, including the National Development Bank, China Tobacco, Yizhuang Guotou, China Mobile and other 8 companies, the industry called the "big fund" 120 billion national IC industry investment fund (hereinafter referred to as "national big fund" ") officially established. As the Chinese government launches the IC industry plan, global semiconductor companies will refocus their attention on China. In the context of the reshuffle of multiple fronts in the global mobile chip market, China's mobile chip makers are expected to use the policy to create a global convergence effect in the mobile chip industry.

Mobile chip multiple battles

Despite the fierce market competition, many fronts in the mobile chip field have not been mixed up because of the melee. From the vertical perspective of the market, the popularization of 4G mobile phones has led to the adjustment of the upstream chip business structure and the extension of the front line to the low-end market. This has led to the Qualcomm, which focuses on the mid- to high-end market, and MediaTek, which has been entrenched in the low-end market, and has a positive confrontation in the low-end market. From the perspective of the market, smart hardware products have emerged, and the development of Internet of Things and wearable devices has led to a surge in demand for chips in related fields, which has provided a new competitive arena for major mobile chip vendors.

China's 4G commercial 10 months, has developed more than 40 million users, the industry chain is further mature, GfK China predicts that in 2014 China's 4G mobile phone retail sales is expected to reach 100 million. On a global scale, the pace of 4G commercialization is accelerating. The mobile phone brand industry is accelerating to move toward the low-end 4G mobile phone market, which makes the 4G mobile phone chip the fastest-selling mobile phone chip in history, and also triggers the adjustment of the chip maker's commercial structure.

Since September, Qualcomm has successively launched its low-end Snapdragon 210, 410, and 615 processors in Hong Kong, Beijing, and San Francisco, expanding the low-end and mid-range mobile phone chips to 64-bit MediaTek.

Beyond mobile phones, the wearable device market has only emerged to attract the attention of chip giants. Qualcomm recently announced that it will spend $2.5 billion to acquire British chip maker CSR, which includes GPS chips, Bluetooth communication chips and IoT chips. Like Qualcomm, Intel is trying to take action to profit from investments in the wearables space. Recently, Intel Edison chip with smart hardware debut China, playing the role of an incubator for China's wearable and intelligent hardware startup team.

How much development space does the wearable device market provide for chip vendors? Basis co-founder Marco Delle Torre said at the Business of API conference hosted by Intel that the amount of data generated by wearable devices will double every 12 months - by 2020, 50 billion new users will be generated. More information.

Chinese market touches industry shuffling

On this side, the China Development and Reform Commission and Qualcomm hit an anti-monopoly lawsuit. On the other hand, Qualcomm annexed the British GPS Bluetooth chip giant CSR for US$2.5 billion. When China’s Ministry of Industry and Information Technology led the launch of the National IC Industry Investment Fund, Intel showed it to China. With a stake of 9 billion yuan. The recent moves of the two giants in the mobile chip market are more or less related to the changes in the Chinese market. Relevant statistics show that China's annual import of integrated circuit chips has reached 200 billion US dollars, which is far more than the amount of oil imports. Since 80% of the chips need to be imported, the Chinese market is affecting the deep reshuffle of the global chip industry.

Both giants have acted. Qualcomm’s anxiety lies in the Chinese government’s anti-monopoly investigation, while Intel’s profit is due to continued decline in revenue. As part of Intel and Ziguang's trading, the two companies will set up a new holding company to include Spreadtrum and Rideco. Industry analysts believe that the Chinese government hopes that Ziguang Group will compete with MediaTek within five years and catch up with Qualcomm within 10 years. .

A small number of competitors in the mobile chip market, Qualcomm is a well-deserved industry overlord in terms of technology, capital and scale. Intel has been playing a follower role from the PC chip into the mobile market. Beyond these two giants, MediaTek's scale advantage gives it a place in the mobile phone chip market. Through the authorization, ARM controlled the source market and patented technology of smart phone chip design, which appeared to be detached in the mobile chip market.

At the edge of the market, Broadcom’s helpless exit confirms the fierce and cruel competition in the mobile chip industry. Prior to Broadcom, there were not many vendors that had withdrawn from the mobile phone baseband chip market. Not only did they have the popularity of Texas Instruments throughout the Nokia era, but also industry leaders such as STMicroelectronics, Ericsson and NVIDIA.

Industrial Polymerization Creates Opportunities for China's "Core"

80% of China's chips need to be imported, and there is almost no gap in the high-end chips of smartphones. In June of this year, the release of Huawei's HiSilicon 920 saw the dawn of China's semiconductor industry, and some people shouted the rise of China's "core". In any case, the development of Huawei Haisi proves that the development of the integrated circuit industry requires sustained and huge investment. Under the support of the National Fund, the central and local policy support, and the sustained release of domestic and international demand, China's IC industry is welcoming a period of strategic opportunity for the rise of the trend.

The story has just begun. Ziguang Group has successfully acquired Spreadtrum Communications and RADICO Microelectronics, and has formed an alliance with Intel. In addition, a number of foreign companies including Global Foundry and UMC are also planning to set up factories in China. The establishment of the National Fund is clearly the latest measure of industry integration, and will cultivate a number of important local enterprises that can compete with international giants.

The prospects for China's IC industry are bright, but the road at the foot is not so good. The development of the global ICT industry shows that integrated circuits are increasingly becoming a feast for the giants. Although there are more than 10 IC design companies listed or about to be listed in China, and nearly 20 companies with annual revenues of more than 100 million US dollars, no one other than Huawei can afford long-term high investment in research and development. Even if individual companies earn more than 100 million yuan, most of them still dominate the low-end and lack technical content. Compared with the Taiwanese market across the Taiwan Strait, Taiwan’s MediaTek has become a giant with annual revenues of more than $5 billion through the acquisition of Ralink and Mstar in the past few years, while even the industry’s cutting-edge Huawei Hisilicon in China is only $1.3 billion. The scale of the real experience of the market baptism is only Spreadtrum's more than 1 billion US dollars. In the IC industry that survives with economies of scale, the lack of giants is difficult to talk about catching up with the international.

Obviously, the national support policy can help enterprises solve the financial problems in a short period of time, but China's mobile chip industry must really rely on the company's own efforts to rise.