Ye Tianchun: Restrict some localities from introducing integrated circuit projects using a “political achievement project” mindset.

　　On December 3, the National Symposium on Work in the Electronic Information Industry and the Working Conference on the Integrated Circuit Industry—hosted by the Ministry of Industry and Information Technology and organized by China Electronics News—were held in Beijing. The conference was convened to study and implement the spirit of the Fifth Plenary Session of the 18th CPC Central Committee, put into practice the National Outline for Promoting the Development of the Integrated Circuit Industry, the Made in China 2025 initiative, and the Guiding Opinions on the “Internet Plus” Action Plan, and to explore development strategies for China’s electronic information industry during the 13th Five-Year Plan period. During the conference, Ye Tianchun, Director of the Institute of Microelectronics at the Chinese Academy of Sciences, delivered a speech on the development status of China’s integrated circuit manufacturing industrial chain as well as his thoughts and suggestions for the 13th Five-Year Plan period.

　　The integrated circuit industry has achieved breakthroughs in six areas.

　　Currently, the world has entered the information age, and China has also proposed a development strategy of “integrated development of informatization and industrialization.” Under these circumstances, chips have become the most critical foundational product. If we fail to address the weakness of the integrated circuit industry, it will be akin to having left the steel supply unresolved during the industrial era. However, since 2008, driven by national policies such as the “01 Special Project” and the “02 Special Project,” China’s integrated circuit industry has achieved significant progress in many areas. Specifically, these advances can broadly be summarized into six key aspects:

　　 First, high-end equipment has achieved breakthroughs in groups, going from nothing to something. Driven by the "02 Special Project," domestically produced equipment has achieved a breakthrough—from having nothing at all to reaching an overall technical level of 28 nanometers. Before the implementation of the "02 Special Project" in 2008, there was absolutely no domestically produced 12-inch equipment available; domestically, only two 8-inch machines supported by the "863" Major National Science and Technology Program were in operation. By 2015, 16 types of 12-inch equipment had already been introduced into large-scale production lines, with the overall technological level reaching 28 nanometers. Among these, 10 key pieces of equipment have either been sold or have entered the procurement process. Furthermore, 29 types of packaging and testing equipment have now developed integrated line capabilities. This means that China has established its own technological foundation in integrated circuit manufacturing. In the past, integrated manufacturing relied heavily on imported equipment, and many of these imports required export licenses from foreign governments—especially the U.S. government. I believe that in the near future, many of these export restrictions will expire, and our situation of being dependent on others will be significantly alleviated.

　 　Second, manufacturing processes have made significant progress. China’s integrated circuit manufacturing technology is now stepping into the international mainstream, and a batch of specialized process technologies tailored to meet industrial and market demands has been developed. Before the implementation of the “02 Special Project” in 2008, China’s mass-production technology was at the 110-nanometer level, while its R&D technology was at the 90-nanometer level. By 2015, cumulative sales of 65/55-nanometer integrated circuit products had reached 4 billion units; the 28-nanometer process had officially entered mass production, and R&D efforts were underway on key technologies for the 20/14-nanometer processes.

　　 Third, we’ve achieved a breakthrough in high-end packaging. China’s packaging and testing industry has entered the world’s leading ranks, with some of its packaging and testing technologies now occupying an internationally advanced position. Before the launch of the special program in 2008, China’s packaging technology was mainly concentrated in the mid- and low-end segments. By 2015, high-density packaging had achieved mass production, enabling China to enter the high- and mid-end packaging markets. Technologies such as copper bumps have achieved independent innovation, and breakthroughs have been made in 3D packaging. At the same time, we have also established the Packaging and Testing Industry Chain Innovation Alliance—a pioneering initiative aimed at fostering innovation across the entire industry chain. This alliance brings together leading enterprises and research institutes within the sector to jointly conduct R&D on common technological challenges. It marks a significant shift: after Chinese companies have risen to the forefront globally, they are now adopting new innovation models to achieve sustainable development.

　　 Fourth, key material products are entering the market in volume. A group of key materials for 8- to 12-inch integrated circuits in China has broken the market monopoly and achieved large-scale domestic sales. Before the implementation of the Special Project in February 2008, these materials were entirely reliant on imports. By 2015, 8-inch silicon wafers and SOI wafers had entered the market in significant quantities, and polishing liquids and target materials had also begun to be commercially available. Local supply of these materials is crucial for reducing manufacturing costs and enhancing competitiveness in the future.

　　 Fifth, the intellectual property environment has greatly improved. Since the launch of this special initiative, 21,938 invention patents have been filed, including 1,993 international patent applications. Breakthroughs have been made in building an independent intellectual property rights system, and China is beginning to establish its own position in the latest global technology generations. For instance, in the 20-14 nanometer technology generation, substantial efforts have been invested in key technologies such as high-k metal gate technology, 22-nanometer planar device integration technology, 16-nanometer three-dimensional device key technologies, and the integration of advanced process technologies with domestically produced equipment. Moreover, given the current widespread attention on memory technologies, this suggests that China may soon carve out its own niche in the very latest technological developments.

　　 Sixth, the specialized achievements will be widely applied and drive innovative development in related semiconductor industries. The specialized achievements have been widely adopted in relevant semiconductor fields, providing impetus for the development of strategic emerging industries. For example, in the photovoltaic sector, domestically produced solar cell equipment sets have begun to replace imported ones, capturing a significant share of the domestic market for solar cell production-line equipment. Beijing Zhongke Xin and Qixing Huachuang have become leading suppliers. In the LED sector, the localization of light-emitting chip manufacturing equipment is progressing rapidly, with Northern Micro emerging as a key supplier. The mass-production model of Zhongwei’s MOCVD products has now been finalized and sales have commenced. In the field of next-generation flat-panel displays, Qixing Huachuang has started supplying equipment to BOE, and AMOLED lithography machines have entered the finalization stage.

　　In summary, since the launch of the major special project, China’s integrated circuit manufacturing industry ecosystem has been comprehensively improved, creating favorable conditions for the industry’s robust development. This includes filling existing gaps, essentially establishing a complete industrial chain, and significantly enhancing the industry ecosystem; markedly elevating technological levels and achieving breakthroughs in innovation capabilities; and playing a crucial role in accelerating the advancement of China’s integrated circuit industry’s technology, strengthening product innovation capacity, and expanding the industry’s scale.

　　Six Recommendations for Industrial Development During the 13th Five-Year Plan Period

　　Given the aforementioned industrial landscape, during the 13th Five-Year Plan period, the integrated circuit industry should pay particular attention to the following aspects:

　　 First, there must be a win-win model for both independent innovation and international cooperation. The integrated circuit industry is highly internationalized; therefore, as China develops its integrated circuit industry, it must adopt a path of openness, cooperation, and alliance. Chinese enterprises need to find a win-win model by balancing independent innovation with international collaboration, moving away from the past approach of mere mergers and acquisitions or the “introduce-digest-absorb-re-innovate” strategy. “Investing abroad and buying in China” represents a new strategy. Similarly, overseas companies seeking to develop in China also need to embrace a cooperative model characterized by mutual interdependence—where “you are in me, and I am in you.” Internationalization is the long-term development direction for Chinese enterprises.

　　 Second, under the new circumstances, we need to place even greater emphasis on innovation. In the past, China’s development model was characterized by a catch-up approach, which is why we’ve long adhered to the strategy of “introducing, digesting, absorbing, and then re-innovating.” With the coordinated implementation of major national projects and the Outline for Promoting the Integrated Circuit Industry, on the one hand, the pace of technological advancement has significantly accelerated; on the other hand, after extensive international mergers and acquisitions and integration efforts, our industry and technology will reach a new height. But once we’ve reached the stage of closely following the leaders, there will be fewer external experiences to draw upon—because everyone is now figuring out the right path forward on their own. Therefore, we must recognize that the latest technologies simply can’t be bought. If China is to continue maintaining its momentum, we must place even greater emphasis on innovation and R&D—especially on original innovation and integrated innovation—and we can no longer rely solely on imitating others. Otherwise, what would we do if others suddenly shift course?

　　 Third, the state must maintain the sustained intensity of its investment in integrated circuits. This point is extremely important. During the 13th Five-Year Plan period, the country should further intensify its efforts in major special projects and key science and technology programs. Under no circumstances should we assume that everything will be fine simply because over 100 billion yuan has been invested in industrial funds. This is a mistake that China has repeatedly made in the development of the integrated circuit industry in the past—lack of continuity in investment has led to intermittent stagnation, causing the gap between us and global leaders to widen ever further. The integrated circuit industry is one characterized by extraordinarily rapid technological advancement and industrial development; lack of sustained investment is a cardinal sin in the development of integrated circuits. Investment—especially in research and development funding—must be continuous if we are to keep pace with the international community.

　　 Fourth, the focus of technological innovation should be on market applications. Innovation in integrated circuits should be oriented toward industrial restructuring, the development of strategic emerging industries, and the intelligent transformation of social services, fostering holistic, systematic, and integrated innovation. At the same time, we should establish innovative R&D alliances to drive innovation across the entire industrial chain. China is shifting from a “follower strategy” to an “innovation-driven leapfrogging strategy,” forging its own distinctive position within the global industrial innovation ecosystem. We must ground our innovation efforts in the Chinese market while striving for world-class breakthroughs, and develop unique innovative technologies and products in several key core technology fields. Through collaborative efforts across the industrial chain, we will transition from technological innovation to innovation in business models.

　　 Fifth, we must remain committed to focusing on integrated circuit manufacturing. “Manufacturing as the foundation of the nation” is China’s national policy, and chips—being the most critical and essential products of the information age—must also be developed through a strong manufacturing base. Manufacturing is an industry that requires substantial investment and yields slow results, yet it forms the very backbone of the entire industrial ecosystem and is absolutely indispensable. Therefore, we must exercise patience when fostering its development. Currently, investment in China’s integrated circuit industry is exceptionally vigorous—a truly positive development. Under these circumstances, we should focus on guiding capital with genuine intent to contribute to industrial development, establishing long-term, sustainable capital platforms. At the same time, we must guard against excessive speculation in the capital markets; capital driven solely by short-term speculation can severely harm the industry’s long-term growth. At present, China’s integrated circuit industry is booming, and there’s a risk of a mixed bag emerging—both high-quality players and less reputable ones. It’s crucial to resist short-termist behavior and avoid inflating the bubble to unsustainable levels.

　　 Sixth, the state must adopt a comprehensive strategic plan for the development of integrated circuits and avoid each department pursuing its own separate agenda. Currently, regions across the country are actively launching initiatives in the integrated circuit industry, playing a major driving role in promoting the development of China’s integrated circuit sector. However, while encouraging such initiatives, it is also essential to establish appropriate regulatory frameworks—especially to curb the practice in some localities of attracting investment projects through a “political achievement” mindset, pursuing investment without regard for costs. Otherwise, this could lead to disorderly competition and repeat the mistakes made in previous years by industries such as LEDs and solar energy, which saw blind investments and low-level duplication. This risk must be particularly avoided when developing the integrated circuit manufacturing sector. As for attracting foreign investment projects, the most critical factor is to focus on deep integration within the industrial chain and to establish new models of independent innovation and development. For example, forging strategic partnerships with system users, supporting domestic equipment and materials supply chains, and engaging in R&D collaboration and talent cultivation with institutions on the Chinese mainland.

　　(Reprinted from China Electronic News)