Exclusive Interview With Ge Qun, Chairman And Global Senior Vice President Of New Technology, China: The New Infrastructure Will Boost The Development Of "Digital Society" Semiconductor.

At the end of 2017, Synopsys announced the establishment of a new strategic investment fund in China, with the initial fund size of US $one hundred million. But since then, the company has not revealed its progress to the outside world too much. Recently, Ge group, chairman and senior vice president of global science and technology in Shenzhen, accepted the exclusive interview with the economic news reporters in twenty-first Century. For the first time, he introduced the progress and future investment strategy of the investment fund since its establishment.

"We hope to solve the pain of Chinese industry." Ge group said, "we have completed the establishment of two joint ventures, each of which has been brewing for more than 1 years before landing." In addition, another main line of investment funds is FOF (fund of the fund), in order to make full use of the new understanding of the industry, and help the industry through the maximization of the fund.

In 2018 and 2019, Xin Si set up two joint venture companies, namely, the core company and the whole core intelligent manufacturing company. The former aims to strengthen local cooperation in the field of chip IP, help local wafer fabs and design enterprises to achieve independent research and development, and master core technologies. The latter aims at strengthening local cooperation in manufacturing EDA field and promoting domestic technological capability.

The new technology is the world's top chip automation design (EDA) solution provider, and the world's top chip IP supplier. As an important tool for chip design, EDA can greatly improve the efficiency and abstraction level of IC design. Nowadays, there are up to ten billion transistors on a small chip, which makes the realization of high-end chip design without EDA. As an important company in the upstream industry chain, the new technology has its own understanding of the development of China's semiconductor industry, the opportunities under the new infrastructure and the long-term impact of the epidemic.

Ge group. Data map

Grow together with China market

Twenty-first Century: why has not disclosed the specific progress of the investment fund before?

Ge Qun: investment fund is an important milestone in the new thinking global strategy. It is a platform to help us better implement the new China strategy. For this reason, we have brewed for a long time. As the only EDA company with over 1000 employees in China, Xin Si not only regards China as a branch, but regards it as one of the most important R & D centers in the world. In New China, more than 8 of its employees are technicians. Unlike the other agency models adopted by other manufacturers when they first entered the Chinese market, Xin Si was a wholly owned subsidiary on the first day of its birth.

In the new look, China's business is a "business" rather than just a few transactions. So we have been thinking, in addition to helping customers in technology, what dimensions can help China's semiconductor industry? The final strategy is to support China's semiconductor industry in the fields of technology, capital, industrial resources and talents. After more than a year of industry adjustment, planning and preparation, we have completed the landing of two joint ventures under this strategy.

Twenty-first Century: how are the two companies making progress?

Ge Qun: the first one is called "core Si Yuan". At that time, we saw that IoT (Internet of things) is an important development direction of China's semiconductor industry, but there are also many pain points, such as lack of local chip IP at the technological level, and high development cost. We hope to support small and medium enterprises in this field with more effective products and cost structure, so we want to build a localized chip IP enterprise, focusing on the mature IoT of IP above 40 nm.

Finally, after discussing with many potential partners, we chose to cooperate with the company that can undertake new IP technology capability. We have been working with us for more than 10 years and are also one of the chip design service companies invested by the National IC investment fund.

Since then, we have aimed at another pain point in China's semiconductor industry, preparing for the second joint venture, that is, "full core intelligence". Wafer fabrication is the focus of national attention, and the big investment of the big fund is chip manufacturing. When chip manufacturing enterprises develop advanced technology, the vast majority of manufacturing EDA come from new ideas, and we occupy about 70% of the market in the world. But the pain is that China's local professional service personnel and strength are not enough, so the market needs a solid body to attract more talents and resources, develop and provide complete solutions on products, and better serve China's integrated circuit manufacturing enterprises.

"All core intelligent manufacturing" started from the end of 2017, and finally landed in 2019. Because of the common industrial layout strategy, CEC and China first came together. Secondly, in terms of capital, in order to ensure localization of joint ventures, we attach great importance to capital ratio control to ensure that domestic capital occupies the dominant position of enterprises. At present, the development of the joint venture is very good, and many leading domestic wafer enterprises are acquiring the technology and all-round services based on the new thinking through the whole core intelligence. In the future, we will launch our own products.

We attach great importance to cooperation with China's industrial ecological partners. Each time we carefully choose different joint ventures to complement each other, and help China's integrated circuit industry together. The new China fund will continue to adhere to this strategy in the future investment.

Twenty-first Century: why do we do this?

Ge Qun: our main goal is not only to do well the business of EDA and IP, but to participate in the growth of China's semiconductor industry. In this process, we focus not on competition but growth. According to market survey data, only 12% of China's chips are supplied by local enterprises, so local enterprises have huge growth potential. If new ideas can be actively involved, the growth of Chinese market will also accelerate the development of new ideas.

Many Chinese enterprises need help in the process of growth, not only by adopting some EDA software and IP, but also by supporting chip technology integration, enterprise management and industrial ecology. We hope to help Chinese enterprises through practice, and at the same time let the brand of Xin think deeply rooted in the hearts of the people.

Another strategy for new investment is to become FoF. After all, our fund was only 100 million (US dollars) in the first phase, compared with the 100 billion scale "big fund". Many industry and investment friends tell me that the new idea is actually the best industrial resource. We have been working in China for nearly 25 years, almost serving every chip enterprise in China. No company knows more about the industry and its customers. The leverage of the new investment fund and other industrial funds will enable us to help more people. Although we can not disclose it for the time being, we have made substantial progress and become one of the LP partners of an industrial fund. Next there will be second or third.

"New infrastructure" boosts digital society

Twenty-first Century: how to view the development of Chinese industry in the past?

Ge Qun: new idea has entered China for 25 years, and I have entered the integrated circuit industry for more than 20 years. Since 1990s, several large volume companies have been set up in China, but they have been in a very early stage until 2000-2006 years ago. At that time, China's semiconductor industry is still groping for development, and the industrial environment has not yet formed a good cycle. After that, the development of China's semiconductor industry has gone through several stages.

In the first stage, we are going abroad. Even China's chip industry has a very large head, and its technology is about two generations later than abroad. However, thanks to the rapid outbreak of domestic enterprises' demand, the growth speed of new thinking business is also far better than that of the industry.

In the second stage, the leading enterprises in China began to catch up, from using the backward two generation technology to the late generation, even with the new technology. But this stage is still our existing tools and methods. Leading domestic enterprises only use them in the same generation, and do not carry out technology discussion and customization before development. Therefore, compared with the progress of foreign countries, Chinese enterprises will still be close to half a year's development progress.

In the third stage, the leading chip design enterprises began to put forward demand in our product definition stage. For example, in the field of chip IP, the lead time of technology is about 8 months to 1 and a half years. Our product definition department and Technology Department will discuss with customers very deeply about their needs and expectations in advance, and make sure that they are what they want. At this time, several domestic chip companies have entered the ranks of the world's first tier companies.

In the fourth stage, some domestic enterprises began to lead the trend of technology. For example, HUAWEI and apple are the first enterprises to use 10 nanometer chip technology and mass production. I am also honored to be a witness and witness to this process from two generations to leaders.

Twenty-first Century: what is the impact of the above developments on the new China business?

Ge Qun: the EDA industry is at the top of the semiconductor industry, and its overall development is relatively stable. It has been so for the past 30 years. All fluctuations will be slowed down upstream, which has both advantages and disadvantages. What can be revealed is that the new thinking has been growing steadily over the past few years and has been growing steadily and rapidly in the Chinese market. This growth is not an ordinary "two digit" but a "big two digit". The new China business has developed from the bottom of the world and Asia Pacific to the leader of the Asia Pacific region. The growth rate of China's business has exceeded the growth rate of China's semiconductor industry. This also gives me no doubt about the development of China's semiconductor industry.

Twenty-first Century: how to view the industrial opportunities of the new infrastructure?

Ge Qun: I am optimistic that if the allocation of resources is reasonable, at least the growth rate of China's semiconductor industry will double. My understanding is that the "new infrastructure" is an epoch-making change of thinking, transforming China from a traditional society into a "digital society". The "digital economy" that we discussed earlier is only an addition to some traditional industries.

For example, today's children may not understand that there was no era of telephone and Internet in the past. The generation born in the digital society would be accustomed to taking classes through high-speed Internet, completing daily business communication with online communication, and using face recognition technology to complete various authentication. This conceptual change will affect every aspect of life, production and industrialization.

The "new" of the new infrastructure is that it is not "new infrastructure" but "infrastructure for the new digital world". It used to be railways, highways, and water conservancy. Now digital society needs 5G, broadband network and data center. There is a certain threshold for entering the digital society, and we already have a good foundation, such as the deployment of 4G and 5G, including basic electricity and transportation.

Twenty-first Century: do we need to be Aboriginal people in the digital age?

Ge Qun: Yes, people who do not know AI in the future may be as competitive as those who do not use search engines now. If everyone accepts this change, the chance of semiconductor will be infinite. The bottom of digital society is software and chips, and chips are carriers of software. Now the chip is silicon based, and there may be other semiconductor compounds in the future. The next 5 to 10 years will be the most golden stage of development for semiconductors.

In the past, many technical directions were only forced to do some superposition, and there was no urgency of demand level. For example, the concept of "Internet of things" has been talked about for many years, and has not been very warm. But if ideas can be changed, the Internet of things will become the foundation of the digital age, and the demand will be another magnitude of increase, at least 10 times. The task of new thinking is to enable the chip industry to design products that the digital society needs faster and less risky.

Industry or turning to "loose coupling"

Twenty-first Century: will the new crown pneumonia epidemic affect the semiconductor industry?

Ge Qun: challenges exist. The report issued by any analytical body is different from the forecast for recession. Before the outbreak, mobile phone sales fell sharply, which affected many people's confidence. For semiconductor companies, they are also prosperous.

But judging from the latest data from the new thinking, we are doing very well, including predictions for the next third and fourth quarters. Looking back, when I go to talk with customers again, they are actually more confident than before. The government has added great confidence to the industry for the wise decision of reopening and resuming production and launching the new infrastructure.

In fact, the semiconductor industry is also thinking about the future direction. For example, there are only a few existing cell phone chips, and the same is true in other fields. The "new infrastructure" has pointed out a new direction for everyone, and has gone out of the confusion of the past two or three years. The accumulation of industry and the test of water are enough. The research and development of chips require a considerable R & D cycle. What we need to do in the cold winter is to concentrate on technology. Wait until half a year or a year later, when the market demand appears, the product will come out just right.

Twenty-first Century: the epidemic also brings some discussions about globalization. What is new thinking about it?

Ge Qun: not just the chip industry, the global economic integration will change. In the past, economic integration was like "strong coupling" in the electronic system (strong correlation between modules). There was a fine vertical division of labor in pursuit of the highest efficiency. Leading enterprises in every field occupied most of the profits. This will make the system very efficient, but also very fragile. But in highly reliable electronic systems, such as smart cars or aerospace, dual backup or even three backup is needed. Efficiency and stability and safety are needed.

Today, the manufacturing capacity of the world is enough, not only to pursue the ultimate efficiency. The industry will shift from focusing too much on global division and cooperation to pursuing a stable system. We call it loosely coupled (weakly inter module) system. But I do not think that greater dispersion is possible.

This system will go to extremes, adjust back and forth, and gradually tend to balance, forming the state of "you have me and I have you". The world may be transforming from a "strong coupling" system to a "loosely coupled" system. For enterprises that are accustomed to the "strong coupling" mode of survival, the challenge is to explore the way of development towards "loosely coupled" mode and make some preparations ahead of schedule.