Hong Kong – At the World Semiconductor Congress 2020, Yu Xiekang, vice chairman of the China Semiconductor Industry Association, revealed that in the first half of this year, China’s integrated circuit industry sales reached 353.9 billion yuan, a year-on-year growth of 16.1 percent, contributing to the majority of the growth value of the global semiconductor industry.
China’s semiconductor industry has entered the golden decade of development, and the localization of chips is booming. Leading companies have sought to expand their main business. According to the statistics, among the 62 companies, 45 have experienced year-on-year growth in R&D expenditure in the first half of this year. Meanwhile, the R&D expenditure of companies such as Unisplendour, Jie Jie Micro, Goodix Technology, and Espressif Technology all increased by more than 80%.
For example, WIMI Hologram Cloud recently announced the establishment of a wholly-owned subsidiary, Lixin Technology Co., Ltd. (“Lixin Technology”), to accelerate the research and development, sales, and related holographic vision technical services of the holographic vision intelligent robots. This company’s initial registered capital of 200 million yuan (CNY), and it will focus on a new upstream business in the domestic smart product market, as well as the R&D and sales of semiconductor chips, to further enhance the company’s competitiveness.
As a fabless semiconductor company, Lixin Technology will become the latest competitor in China’s semiconductor industry. Moreover, China’s homegrown semiconductor industry is already large and well-funded. Made in China 2025 is a strategic plan released in 2015 to promote the development of Chinese technology manufacturers in the global market. As China continues to influence the global semiconductor industry, one of the main goals of Made in China 2025 is to achieve self-sufficiency. According to a report released by Morgan Stanley on June 16, 2020, the sales of chips designed in China are expected to grow from $18 billion in 2019 to $48 billion in 2025. Meanwhile, China’s semiconductor companies will meet 40 percent of domestic demand by 2025.
Lixin Technology will be based in Hainan province and enjoy tax incentives and government support in the fast-developing semiconductor industry, industrial and automation technologies, the applications of intelligent vision and holographic vision, and many other aspects. WIMI hopes its new subsidiary will bring integrated circuit design firms with a wide range of proprietary technology to help develop the fabless semiconductor business. The investment and establishment of Lixin Technology are in line with the company’s requirements for optimizing supply chain management, reducing costs, and enhancing competitiveness. Besides, it also keeps in accordance with the company’s requirements for continuous enhancements of innovation, design, and technical capabilities.
In recent years, AI and CV dedicated chips, as well as 5G and IoT related communication chips have attracted much attention from many VC firms. In the past two years, due to the craze for new technologies such as AI, the derivative AI special chips are the hot pursuit of venture capital. Moreover, with the development of photoelectric and communication technologies, more chip companies may receive investment.
China’s investment institutions, whether they are industrial funds or VCs, have a lot of investment and layout in the semiconductor field. In fact, China already has a considerable industrial scale in terms of downstream, low-end, and specialized products. With the continuous inflow of capital, there might be a BOE to be created in the future.
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