People's "fried core": Ali takes the lead and follows the trend

On April 16, this year, the U.S. Department of Commerce banned U.S. companies from selling components, software, and technology to ZTE for seven years. As a core component, it has also been the chip of China's short board. It hurt the Chinese people's nerves for a while.

In the past week, the chip has become a popular fried chicken, and the Chinese core has been regarded as a treasure.

The Sino-US trade war and ZTE's ban were undoubtedly the trigger of the entire incident. On April 16, this year, the U.S. Department of Commerce banned U.S. companies from selling components, software, and technology to ZTE for seven years. As a core component, it has also been the chip of China's short board. It hurt the Chinese people's nerves.

A number of companies have thrown out their chip layouts, set up topics from various dimensions of the media and even the mass media. Under the boost of the stock market and nationalist sentiment, a sunny April in the country staged a national speculation campaign. .

Ali's fried lead

There are four groups of protagonists in the national core speculation campaign: * Dial is a company that has been announced as a chip through ZTE ’s banned hot spots recently; the second group is the new media and the mass media set the agenda from various angles to spread; The third round is the masses dominated by nationalism; the fourth round is fueled by stockholders, and affected by this, A-share chip concept stocks rose sharply.

* Dial-ups include Internet giants, traditional chip companies, and start-up companies, each of which uses the pain of ZTE or under the banner of "China Core" to promote themselves or mass-produced or not mass-produced, or released Or a chip in the belly, come to a hot spot. Among them, Alibaba, Today's Toutiao and AI startup Rokid have become representatives of this kind of speculators.

On April 19, three days after the ZTE incident, Ali first revealed the chip research and development news: Alibaba's Damo Institute is developing a neural network chip Ali-NPU.

About this AI chip, Ali Core revealed two news. One is that this chip comes from the chip research and development team of Dharma Institute, and has reached dozens of people in the United States and Shanghai. Image, video recognition, cloud computing and other scene development. However, there is no more news, such as research and development investment, launch time, specific applications, and who is responsible for it.

Perhaps because of this, the news has not received widespread attention and widespread dissemination. As an industry insider said, Ali can only say that he has done what he should have done. This move is enthusiastic.

Then on the 20th, Ali released a "ruthless move" and announced that it would wholly acquire Zhongtian Micro, a company that does embedded CPU IP. The CPU is one of the core components of the chip SoC, and Zhongtian Micro is also one of the few domestic CPU suppliers based on independent instruction architecture and mass production. Ali's acquisition has a significant impact on both its own significance and the domestic semiconductor industry structure.

But it is interesting that Ali was the largest shareholder of Zhongtian Wei in January 2016, and in 2017 Ali injected 500 million yuan into Zhongtian Wei. Some people in the industry joked that "Ali was the controlling shareholder of Zhongtian Micro in 2016, and this is a PR". Recently, more media have dug out the "Hanxin" incident of the year ...

This matter is not over yet. In an interview on April 21st, Zhang Jianfeng, CTO of Ali Group, further pointed out that in addition to Zhongtian Wei, Ali also invested in 5 other chip companies (Cambrian, Barefoot Networks, Shenzhen Jian, Nerner Kneron,翱 Jie Technology ASR). Based on the information of the previous two days, it was further clearly passed that Ali also invested in 5 other chip companies. As soon as the data came out, it caused the network to spread.

Under the ZTE incident, Ali's spread this time can be described as interlocking and progressive layers, playing an important role in the national core movement.

Rokid and today's headlines keep up

If Ali has taken advantage of ZTE, there is another company behind it that has revealed the news of AI chips. After the news of Ali's acquisition of Zhongtian Micro on April 20, the Rokid CEO Zhu Mingming also revealed the AI chip in the circle of friends.

Immediately afterwards, the media revealed that this AI chip has completed mass production and will be installed in Rokid's new products. It will be unveiled at a new product conference held in June. Is this the founder who didn't hold back after the Ali chip came out, or did he take advantage of his suspense for his own AI chip and conference?

In fact, the intelligence about Rokid's chip making has been noticed before. On April 13, an investor took the initiative to disclose to the East and West: "Samsung Semiconductor's China team will collectively switch to another AI startup in Hangzhou next Monday." The investor boasted about this AI company, and Zhiwu speculated that it might be Rokid based on the clues. Could it be sent to promote it? He also said that Rokid is developing products with some government agencies.

Then on April 16, Zhou Jun, the former director of Samsung Semiconductor (China), did join Rokid as the vice president of the basic platform. Many people speculated that this was paving the way for the chip. Unexpectedly, the news of Rokid making chips was released 4 days later. But it is worth mentioning that many of the startups' main businesses have not yet broken through, and they have to build chips every now and then.

Just this Tuesday, today's headline also joined the tide of "fried core". On April 24, according to media reports, Yang Zhenyuan, vice president of BYTE (the parent company of Today's Headline) publicly stated that the company has a global number of users who upload videos that need to be analyzed and processed, and the platform recommendation engine also needs powerful machine learning computing power. There are a lot of chip purchases and applications. Currently actively seeking breakthroughs in chip-related fields.

The term "actively seeking a breakthrough" is intriguing. Is it a self-developed AI chip or a customized chip through cooperation with a chip company? As for the other news, there is no way to know.

The involvement of new media, especially the mass media, has magnified the enthusiasm of this core by a factor of ten or a hundred. In the past week, a variety of discussions around "China Core" have emerged, "ZTE is banned, Huawei and Haikang are anxious", "Domestic cores rely on BAT", "Lack of cores is due to lack of money", "Chinese core unicorns" and so on. Colleagues who have reported facts, major media are analyzing the "China Core" problem and way out. Under various sensational headlines, they are constantly stimulating readers' nerves and making more people join the army of speculators.

Stock market turmoil: chip concept stocks only have daily limit

There is also a key group of people in this speculation movement: stockholders, they are actually the earliest participants of this movement, and they are really "frying speculation", and have triggered frequent stock price limit of A-share chip concepts.

Through observation, it was found that due to the ZTE incident, the chip segment of the domestic A-share market set off a strong rise. On April 18, it was an important node of the A-share chip segment. Ziguang Guoxin, Datang Telecom, Bichuang Technology, Infront Micro , Wenyi Technology, Tianyi shares, Northern China Chuang and other 19 concept stocks daily limit. Since the 18th, the trading volume of stocks has increased several times in the following days, which has also led to a number of concept stocks such as National Technology, Ziguang Guoxin, and Northern Huachuang all rising more than 20%.

According to Wind information data, as of the close of April 24, the chip localization index started from a low of 3852.89 on February 8 this year and has rebounded to 5802.36 points, an increase of 50.6%. This data also reflects to some extent the recent fever of China's core.

Let's take Ziguang Guoxin, a well-known domestic integrated circuit chip design and system integration solution provider, as an example to see the recent changes driven by investors' speculation.

Ziguo Guoxin's recent stock price

It can be seen that since the ZTE incident, the share price of Ziguang Guoxin has increased significantly recently. The closing price on April 16 was 47.94 yuan, and the closing price as of April 24 was 59.10 yuan, an increase of 23%.

On the other hand, from the perspective of the trading volume of the stock, on April 16, the trading volume of Ziguang Guoxin was only 350,000 hands, while the trading volume reached 800,000 hands on April 18, and reached a peak of 1.058 million hands on April 19. . Compared with the 16th, the trading volume on the 19th increased more than 3 times. In addition, from April 18 to April 24, Ziguang Guoxin's stocks maintained a high trading volume. This phenomenon reflects, to some extent, the investors' pursuit of A-share chip concept stocks in the near future, and the speculation behavior of investors has led to a substantial increase in the trading volume of chip stocks.

However, at the same time that the trading volume of Ziguang Guoxin's stock has greatly increased, since reaching its peak on April 19 (which is the peak period that everyone is talking about), the trading volume of Ziguang Guoxin's stock has also shown a downward trend. How long the increase can last is unknown.

Recent stock price of SMIC

Infront Micro's recent stock price

Not only is Ziguang Guoxin like this, the performance of SMIC, Infront Micro, Datang Telecom and other stocks are similar. The stockholders' speculation movements have effectively reflected the trend of A-share chip concept stocks.

The gap of the Chinese core

However, stockholders fired the Chinese chip, but it cannot change the current state of the Chinese chip.

According to Choice financial terminal data, the 69 stocks of China's A-share chip concept stocks have a total market value of about 11.265 billion yuan (as of April 21, 2018). The market value of Intel alone is 2411.16 billion US dollars, which is about 15236 billion yuan. This means that the total market value of China ’s A-share chip concept stocks is less than that of an American chip giant Intel.

According to the Beijing News, 57% of A-chip concept stocks have a gross profit margin of less than 30%. For example, the relatively leading domestic gross profit margin of Ziguang Guoxin is only 33.14%, while the gross profit margin of some international chip giants is generally Both are above 50%. This in turn reflects the lack of profitability of China's chip industry.

Recently, many people in the industry have analyzed the problems of China's chip industry. Liang Ning, who had participated in the creation of China's independent CPU and operating system, recalled in this memory that as long as the intellectual property rights are selected, the technical route is selected, and people who are able to do it can be made in China. The chip can make it, but what is uncertain is the operating system and ecology. As in those days, we could bypass Intel and not Microsoft. Today, bypassing ARM, Android is impossible. And she attributed this deep cause to the constraints of the system's assessment methods.

Professor Wei Shaojun, a professor at Tsinghua University and director of the Institute of Microelectronics, once concluded: "Although the chip manufacturing industry is developing rapidly, it is mainly processed for overseas customers; despite the rapid growth of the chip design industry, it mainly uses overseas resources."

And Ling Yun, general manager of Hangzhou Guoxin Artificial Intelligence Division, specifically pointed out that foreign companies have more advantages than domestic ones in high-end RF, high-speed interfaces, high reliability (such as industrial, automotive electronics) chips, core CPU / GPU. However, he also said that the gap between Chinese chips and foreign countries in consumer electronics has narrowed, and has even begun to pick the big shots.

It is time for the industry to return to calmness and rationality in response to the recent fiery national speculation movement. As Ling Yun said: "Chip is an industry with a large investment and a long cycle. There are no years of sedimentation, several iterations, and the chip is not good. The production process is not the threshold for *. The threshold for * is to make chips. Stay lonely and invest long-term, not quickly. "

As one of the beneficiaries of this enthusiasm and one of the first batch of domestic AI chip start-ups, Yao Song, CEO of Shenzhen Kam Technology, also believes that the industry should be more down-to-earth and calm, after all, the development of domestic chips requires decades of persistent bottom Technological innovation does not happen overnight. Overheating of the industry will generate a lot of bubbles. Once the heat begins to weaken, a large number of companies will enter the industry reshuffle phase-out period, which is not conducive to the healthy development of domestic chips.

Shen Jin, vice president of Qualcomm Global and managing director of Qualcomm Ventures, also told Zhiwu:

"Today, some of our founders and investors do not have a clear understanding of the nature of semiconductors and still have a short-term vision to participate in this industry. The result must be failure and disappointment. The startup time and * time of semiconductor companies and chip companies are Internet companies are much longer. "

Conclusion: the industry needs to return to rationality

In 2017, China's imports of integrated circuits reached 377 billion pieces, exceeding 260.1 billion US dollars, while China's total crude oil imports during the same period were only about 150 billion US dollars. China has already spent nearly twice the price of crude oil on the import of semiconductor chips, and the chip industry is indeed an area that China urgently needs to improve and improve.

However, under the national speculation campaign, we need to rationally and calmly see the current status of the domestic chip industry: On the one hand, the total market value of China's A-share chip concept stocks is not as good as the international chip specific Intel. In memory devices, general electronic systems, and computer systems, The core integrated circuit field is seriously lacking. On the other hand, chip is an industry with large investment and long cycle (generally takes 18 months to 24 months). It takes years or even decades of accumulation and iteration to achieve a breakthrough.

At the same time, the huge talent gap in China's semiconductor industry and the lack of chip designers and architects cannot be filled overnight. Despite the promotion of national policies and the National Chip Development Fund, the chip industry still needs to return to rationality, and chip development takes time.
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