The rapid changes in the global PC landscape have added more variables to the upstream IC design industry. In particular, Taiwan, which ranks as the second largest IC design center in the world, is also facing pressing pressures for transformation due to the weakening of traditional PC forces.
"Taiwan's IC design industry was born out of PCs," said Lin Rongjian, vice president of sales and customer services for AsiaSoft at SpringSoft. The Taiwanese electronics industry, which started as a foundry, became a major source of telecommunications equipment manufacturing. After IC design became a rising trend, it provided local manufacturers with fast IC supply services ranging from design to mass production, and jumped to the world at a very fast pace. The status of the two major IC design countries.
Although this industry model has created Taiwan's IC design that can provide the advantages of cost reduction and rapid delivery through a complete design and manufacturing industry chain, the industrial ecology, which is dominated by OEMs, has made it difficult for local industry players to tap into Intel’s long-term AMD or other key graphics chip and chipset vendors hold the key supplier of PC system components. Therefore, Taiwan's main IC design is almost all around the main system off-chip PC / peripheral applications.
In terms of PCs, the CPU and chipset in the entire information manufacturing industry are currently dominated by Intel. Yang Ruilin, research manager of IEK Semiconductor, ITRI pointed out that in terms of chipset, only VIA (VIA) and SiS (SiS) are in Taiwan. ) has long since withdrawn. Today, other peripheral parts on the motherboard have entered fierce cost competition. Therefore, as long as the specification is good enough, many world-class PC makers will adopt Taiwan's ICs because quality and cost are the top considerations.
"Based on PC/peripheral, communications, and consumer electronics, the three major application areas are classified. Currently, the application of Taiwan IC design in these three major areas is about one third," said Gu Xinyi, senior industry analyst at CSI, MIC. She pointed out that Taiwan still accounts for at least 50% of the market (up to 90% of monitors) in areas such as computer monitor control chips and display driver ICs. In addition, the DVD/CD player control chip is also the strength of Taiwan's IC design, with a share of at least 60%.
However, the entire electronics industry has changed its architecture.
In recent years, communications and consumer electronics have become another major market for IC design companies in Taiwan. Under the pressure of a year-on-year growth rate of PC growth, Taiwan-based IC companies are constantly trying to step into emerging applications, such as entering the mainland's white-brand mobile phone market, from DVDs, video switch boxes (STBs), to televisions and mobile phones. MediaTek, as well as MediaTek and Morningstar, who have broken into the supply chain of Japanese and Korean television brands, are the best examples.
The most popular areas of IC design in Taiwan today are mobile phones and TVs, not PCs. The newly emerging tablet is still behind, Yang Ruilin said.
Indeed, Taiwan’s most popular wafers are mobile phones, LCD driver ICs and TV chips, Lin Rongjian said. Driven by the big trend of the action boom, mobile-related chips continue to grow.
"Taiwan's IC design industry has risen because of the vertical division of labor in the PC industry," Gu Xinwen pointed out. Then, when the traditional vertical PC industry structure disintegrates, what changes will take place in the local IC design industry?
Industrial Structure Taiwan's IC design industry has always been a cluster of SMEs. Yang Ruilin pointed out that from 2005 to 2010, the number of Taiwanese IC design industry players has barely changed. In 2005, there were 268 companies; in 2010, only 266 were reduced. In 2005, the scale of Taiwan's IC design industry was less than NT$5 billion accounting for 95.2%; and by 2010, the size of Taiwanese IC design industry was less than NT$5 billion accounting for 92.9%. The scale is greater than 10 billion Taiwan dollars only 6, accounting for 2.2%. From 2005 to 2010, Taiwan’s IC design industry revenue grew by 60%, and its average revenue grew from 1.1 billion to TWD 1.7 billion.
These figures represent a stable market based on SMEs.
Judging from the global IC design layout, the United States has been stably occupying about 70% of the market; Taiwan’s share has always been between 21% and 22%, said Lin Rongjian of Siyuan. From the point of view of the industrial structure, the United States is equivalent to mastering the upper and middle reaches of the market, while Taiwan generally holds a stable position in the midstream and downstream end markets.
However, the role of Taiwan's IC design industry is hard to replace. Lin Rongjian pointed out that when a product standard was just confirmed, or that the technology was in the early stages of its adoption,
At this time, a small number of products have been shipped, and Taiwanese companies can provide solutions with the best price/performance ratio in a short period of time, and they can quickly mass-produce them. This feature is very important to the global technology industry because behind all the trends in applications and products, there is a need to be able to quickly implement it.
“Everybody in the world, when someone wants to develop an innovative product, it should think of Taiwan first, because only here has the ability to quickly turn ideas into real products, but also to optimize quality and cost at the same time.†Lin Rongjian said.
Challenges and the future Not only IC design, but also the fact that the entire semiconductor industry today is facing 'slow growth'. In order to pursue growth, manufacturers must strike a balance between revenue growth and gross profit, and must also quickly move to markets with more growth potential, such as mobile devices.
Mobile applications are the most important driving force in the semiconductor industry. Aart De Geus, CEO of Synopsys Technologies, points out that even in the uncertain economic outlook today, the growth potential of the mobile market is still very large. "It's very interesting that there are still a lot of users continuing to change their mobile phones over the past two years," he said.
Under the catalysis of action, the layout of the technology industry has also changed. Leaders have realized that they must master key technologies for operations. As a result, the industry has started an upsurge in patent bidding recently. “We are bidding on patents from Apple, Microsoft and many other companies. The case of Google’s purchase of Motorola Mobility later echoed this trend,†said Aart De Geus.
Now, the question for Taiwan is: When the patents and core technologies are completely in the hands of others, where is the future direction? Some industry experts put forward their views from a macro perspective.
"The semiconductor industry 60 years ago has only been at the beginning of development," said Wu Tianyu, chief operating officer of the Sun Moonlight Group. “In 2009, the overall semiconductor industry accounted for only 0.5% of the gross domestic product (GDP) of the world, compared with 0.6% in 2010.†From this perspective, there is still great room for development in semiconductors, not to mention the current The semiconductor industry has just expanded from traditional capital computing computing to consumption, home appliances, and wider applications.
The changes in the industry are getting faster and faster. The history of using R&D to drive the application market has long since gone. Today's electronics industry is facing a rapidly changing terminal market. It constantly generates demand for electronic products and emerging functions through consumer demand. This in turn becomes a driving force for the development of electronic equipment. Once it is unable to meet market demand, it will soon suffer. To the elimination.
In this area, Taiwan's design and manufacturing industries can fully meet the demand. “We can divide the technology industry into three major segments in accordance with the operating model: The first is the industry that consumes the most human resources and can minimize costs. Like TSMC and Hon Hai, this is a representative of this area. Manufacturing capacity is the basic structure of the entire electronics industry, and the second is the ability to perform Holistic design, architecting the entire ecosystem, mastering IP and core technologies, and setting up industry standards, and Apple is the representative of this field. In addition, there is an industry between the two that can use off-the-shelf technology to find the right people at the lowest cost to make money," said Wu Tianyu.
According to this definition, most of Taiwan's technology industry is positioned in the first category, ie, the infrastructure. However, Wu Tianyu pointed out that many manufacturers who are responsible for providing the infrastructure for this industry are driven by the long-tail effect—all industries that are now becoming a trend, including PCs, laptops, and mobile phones. The winners can obtain large orders and the output increases year by year, but the gross profit is reduced year by year.
Therefore, “What are the tasks for the industry responsible for providing infrastructure, including the Sun and the moon, to set up standards that the industry can follow?†said Wu Tianyu. Take the example of Riyueguang, which has been betting on advanced copper wire processes for many years and is looking to become a technology leader in the packaging industry.
This trend is also fundamentally changing the entire technology industry. "Imagine 2025. How many of the technology companies we are familiar with today still exist?" Yang Ruilin said. Not only the IC design, but also the major players such as TSMC, Riyueguang, MediaTek, Morningstar, and Zhiyuan, which are well-known to the general public, will be able to meet the needs of companies that can provide more types of services or integrate multiple service capabilities. The needs of future brand owners."
The division of labor in the future may not be so clear. In order to meet different needs, the technology industry will undergo continuous division, consolidation, re-disintegration or reintegration. “The ultimate ability to stay may be able to integrate well from the upstream to the downstream. , a company that provides complete design or even manufacturing services,†Yang Ruilin said.
The electronic industry we are aware of is undergoing tremendous changes, but these changes are only a beginning.
"Taiwan's IC design industry was born out of PCs," said Lin Rongjian, vice president of sales and customer services for AsiaSoft at SpringSoft. The Taiwanese electronics industry, which started as a foundry, became a major source of telecommunications equipment manufacturing. After IC design became a rising trend, it provided local manufacturers with fast IC supply services ranging from design to mass production, and jumped to the world at a very fast pace. The status of the two major IC design countries.
Although this industry model has created Taiwan's IC design that can provide the advantages of cost reduction and rapid delivery through a complete design and manufacturing industry chain, the industrial ecology, which is dominated by OEMs, has made it difficult for local industry players to tap into Intel’s long-term AMD or other key graphics chip and chipset vendors hold the key supplier of PC system components. Therefore, Taiwan's main IC design is almost all around the main system off-chip PC / peripheral applications.
In terms of PCs, the CPU and chipset in the entire information manufacturing industry are currently dominated by Intel. Yang Ruilin, research manager of IEK Semiconductor, ITRI pointed out that in terms of chipset, only VIA (VIA) and SiS (SiS) are in Taiwan. ) has long since withdrawn. Today, other peripheral parts on the motherboard have entered fierce cost competition. Therefore, as long as the specification is good enough, many world-class PC makers will adopt Taiwan's ICs because quality and cost are the top considerations.
"Based on PC/peripheral, communications, and consumer electronics, the three major application areas are classified. Currently, the application of Taiwan IC design in these three major areas is about one third," said Gu Xinyi, senior industry analyst at CSI, MIC. She pointed out that Taiwan still accounts for at least 50% of the market (up to 90% of monitors) in areas such as computer monitor control chips and display driver ICs. In addition, the DVD/CD player control chip is also the strength of Taiwan's IC design, with a share of at least 60%.
However, the entire electronics industry has changed its architecture.
In recent years, communications and consumer electronics have become another major market for IC design companies in Taiwan. Under the pressure of a year-on-year growth rate of PC growth, Taiwan-based IC companies are constantly trying to step into emerging applications, such as entering the mainland's white-brand mobile phone market, from DVDs, video switch boxes (STBs), to televisions and mobile phones. MediaTek, as well as MediaTek and Morningstar, who have broken into the supply chain of Japanese and Korean television brands, are the best examples.
The most popular areas of IC design in Taiwan today are mobile phones and TVs, not PCs. The newly emerging tablet is still behind, Yang Ruilin said.
Indeed, Taiwan’s most popular wafers are mobile phones, LCD driver ICs and TV chips, Lin Rongjian said. Driven by the big trend of the action boom, mobile-related chips continue to grow.
"Taiwan's IC design industry has risen because of the vertical division of labor in the PC industry," Gu Xinwen pointed out. Then, when the traditional vertical PC industry structure disintegrates, what changes will take place in the local IC design industry?
Industrial Structure Taiwan's IC design industry has always been a cluster of SMEs. Yang Ruilin pointed out that from 2005 to 2010, the number of Taiwanese IC design industry players has barely changed. In 2005, there were 268 companies; in 2010, only 266 were reduced. In 2005, the scale of Taiwan's IC design industry was less than NT$5 billion accounting for 95.2%; and by 2010, the size of Taiwanese IC design industry was less than NT$5 billion accounting for 92.9%. The scale is greater than 10 billion Taiwan dollars only 6, accounting for 2.2%. From 2005 to 2010, Taiwan’s IC design industry revenue grew by 60%, and its average revenue grew from 1.1 billion to TWD 1.7 billion.
These figures represent a stable market based on SMEs.
Judging from the global IC design layout, the United States has been stably occupying about 70% of the market; Taiwan’s share has always been between 21% and 22%, said Lin Rongjian of Siyuan. From the point of view of the industrial structure, the United States is equivalent to mastering the upper and middle reaches of the market, while Taiwan generally holds a stable position in the midstream and downstream end markets.
However, the role of Taiwan's IC design industry is hard to replace. Lin Rongjian pointed out that when a product standard was just confirmed, or that the technology was in the early stages of its adoption,
At this time, a small number of products have been shipped, and Taiwanese companies can provide solutions with the best price/performance ratio in a short period of time, and they can quickly mass-produce them. This feature is very important to the global technology industry because behind all the trends in applications and products, there is a need to be able to quickly implement it.
“Everybody in the world, when someone wants to develop an innovative product, it should think of Taiwan first, because only here has the ability to quickly turn ideas into real products, but also to optimize quality and cost at the same time.†Lin Rongjian said.
Challenges and the future Not only IC design, but also the fact that the entire semiconductor industry today is facing 'slow growth'. In order to pursue growth, manufacturers must strike a balance between revenue growth and gross profit, and must also quickly move to markets with more growth potential, such as mobile devices.
Mobile applications are the most important driving force in the semiconductor industry. Aart De Geus, CEO of Synopsys Technologies, points out that even in the uncertain economic outlook today, the growth potential of the mobile market is still very large. "It's very interesting that there are still a lot of users continuing to change their mobile phones over the past two years," he said.
Under the catalysis of action, the layout of the technology industry has also changed. Leaders have realized that they must master key technologies for operations. As a result, the industry has started an upsurge in patent bidding recently. “We are bidding on patents from Apple, Microsoft and many other companies. The case of Google’s purchase of Motorola Mobility later echoed this trend,†said Aart De Geus.
Now, the question for Taiwan is: When the patents and core technologies are completely in the hands of others, where is the future direction? Some industry experts put forward their views from a macro perspective.
"The semiconductor industry 60 years ago has only been at the beginning of development," said Wu Tianyu, chief operating officer of the Sun Moonlight Group. “In 2009, the overall semiconductor industry accounted for only 0.5% of the gross domestic product (GDP) of the world, compared with 0.6% in 2010.†From this perspective, there is still great room for development in semiconductors, not to mention the current The semiconductor industry has just expanded from traditional capital computing computing to consumption, home appliances, and wider applications.
The changes in the industry are getting faster and faster. The history of using R&D to drive the application market has long since gone. Today's electronics industry is facing a rapidly changing terminal market. It constantly generates demand for electronic products and emerging functions through consumer demand. This in turn becomes a driving force for the development of electronic equipment. Once it is unable to meet market demand, it will soon suffer. To the elimination.
In this area, Taiwan's design and manufacturing industries can fully meet the demand. “We can divide the technology industry into three major segments in accordance with the operating model: The first is the industry that consumes the most human resources and can minimize costs. Like TSMC and Hon Hai, this is a representative of this area. Manufacturing capacity is the basic structure of the entire electronics industry, and the second is the ability to perform Holistic design, architecting the entire ecosystem, mastering IP and core technologies, and setting up industry standards, and Apple is the representative of this field. In addition, there is an industry between the two that can use off-the-shelf technology to find the right people at the lowest cost to make money," said Wu Tianyu.
According to this definition, most of Taiwan's technology industry is positioned in the first category, ie, the infrastructure. However, Wu Tianyu pointed out that many manufacturers who are responsible for providing the infrastructure for this industry are driven by the long-tail effect—all industries that are now becoming a trend, including PCs, laptops, and mobile phones. The winners can obtain large orders and the output increases year by year, but the gross profit is reduced year by year.
Therefore, “What are the tasks for the industry responsible for providing infrastructure, including the Sun and the moon, to set up standards that the industry can follow?†said Wu Tianyu. Take the example of Riyueguang, which has been betting on advanced copper wire processes for many years and is looking to become a technology leader in the packaging industry.
This trend is also fundamentally changing the entire technology industry. "Imagine 2025. How many of the technology companies we are familiar with today still exist?" Yang Ruilin said. Not only the IC design, but also the major players such as TSMC, Riyueguang, MediaTek, Morningstar, and Zhiyuan, which are well-known to the general public, will be able to meet the needs of companies that can provide more types of services or integrate multiple service capabilities. The needs of future brand owners."
The division of labor in the future may not be so clear. In order to meet different needs, the technology industry will undergo continuous division, consolidation, re-disintegration or reintegration. “The ultimate ability to stay may be able to integrate well from the upstream to the downstream. , a company that provides complete design or even manufacturing services,†Yang Ruilin said.
The electronic industry we are aware of is undergoing tremendous changes, but these changes are only a beginning.
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