Rebirth 99 to become a car giant.

Chapter 257: Car-grade chips, this is a huge pit!

Chip Cao Yang must do it.

But the chip is definitely not something that is easy to get.

Even among the tens of thousands of parts in the entire car, the technical threshold for chips is the highest.

Regardless of the chips in cars, they are generally much behind those used in mobile phones and computers.

However, the development of automotive-grade chips is no less difficult than the chips on mobile phones and computers.

This requires a lot of time, energy and money to invest.

The most troublesome thing is that I spent a lot of hard work and manpower and material resources on research, and finally got some results...

Then the research results are likely to be inferior to mature chips imported from overseas.

Naturally, few car companies are willing to do this kind of loss-making business.

This has further aggravated the generally low enthusiasm of the domestic chip industry.

From raw materials to being delivered to customers, a chip must go through wafer production, which is also considered raw material production.

Then there are the steps of chip design, chip manufacturing, packaging and testing.

There are actually many types of parts related to chips used in cars.

Generally speaking, it can be divided into microprocessors, analog devices, sensors, ASIC/ASSP, discrete devices and memory devices by type.

Microprocessors are actually automotive CPUs and are basically monopolized by Freescale, Texas Instruments, Infineon, STMicroelectronics, Renesas, and Fujitsu. The market concentration of these giants is as high as over 70%.

In the ASIC/ASSP field, Freescale, Texas Instruments, Infineon, STMicroelectronics, NXP, Bosch, Panasonic and other manufacturers account for more than 50% of the global market.

Analog devices and discrete devices are monopolized by ON Semiconductor, Infineon, STMicroelectronics, NXP, Toshiba, and Renesas. The market concentration of these giants is also as high as over 70%.

Image sensors, acceleration sensors, and gyroscopes are monopolized by STMicroelectronics, Sony, ADI, Bosch, Freescale, VTI and other companies.

Among them, the image sensor market concentration is as high as 90%, the acceleration sensor market concentration is as high as 70%, and the gyroscope market concentration is as high as 60%.

Of course, most cars do not deal directly with these manufacturers, but trade with parts giants such as Continental, Bosch, Denso, Delphi, Hitachi, ZF, Brose, Valeo, and Aisin.

These components are purchased by these parts giants, and they even purchase them through traders.

As a result, various car companies have even less control over chip-related parts.

This is also when chip supply problems begin to appear in 2020, and the impact will be so large and long-lasting.

To put it mildly, the OEMs don’t even know where the chips on their various parts come from.

This is also an important reason why suppliers such as Bosch and Continental have become unique players in the automotive industry.

Now that Nanshan wants to engage in ECU and other control parts, this is definitely going to upset giants like Bo.

It’s no wonder people’s reactions were so intense.

As an automotive-specific microcontroller, ECU is composed of a microprocessor, memory, input/output interface, analog-to-digital converter, and large-scale integrated circuits such as shaping and driving.

There are many chip-related parts that need to be used above.

Although it is only Infineon that has started to restrict the purchase of chips from Nanshan Group, Cao Yang is fully aware of the crisis.

Who knows if Infineon listened to Bosch's persuasion to deal with Nanshan today, and whether chip companies such as NXP and Renesas will also jump in to deal with Nanshan tomorrow?

Even in more than ten years, when Nanshan becomes the world's largest parts company, will the situation become more serious?

Taking this into consideration, Cao Yang's emphasis on the Semiconductor Division of Nanshan Research Institute has increased even more.

"Ayang, although there are several domestic chip companies such as SMIC that can produce some chips, no domestic manufacturer can produce automotive-grade chips so far."

"For example, for chips in consumer electronics, everyone mainly focuses on the performance of the chip, and does not have high requirements for the working environment and reliability."

"Automotive electronics does not have high requirements for chip performance, but has extremely high requirements for reliability, stability and lifespan."

"When we use mobile phones or computers on a daily basis, we have more or less encountered crashes, blue screens, etc. The treatment methods are nothing more than restarting, repairing, and replacing new ones, which will not involve life safety issues."

"But if something similar happens to a car, it is likely to result in a car crash and death. The severity is not at the same level at all."

"Therefore, the industry generally sets the defective rate of automotive chips at one per million, which invisibly raises the threshold for automotive-grade chips to a whole new level."

"I'll give you a few specific examples to let you feel the requirements for the working environment and lifespan of automotive-grade chips."

“车规级芯片必须在-40c至175c、95%湿度、50G的剧烈震动、15至25kV的静电等条件下，保证20年工作寿命。”

Xiang Changle is an expert in the research of automotive electronics and control parts.

Although he is not very professional in the chip field, he is definitely much better than Cao Yang.

So if Nanshan wants to develop chips, Cao Yang must go to Xiang Changle to discuss it.

"Your major has nothing to do with semiconductors, so you may not have much idea about humidity and static electricity."

"Then I will explain it in the most understandable way, temperature. You will know by comparing it."

Xiang Changle saw that Cao Yang listened carefully and took notes from time to time, so naturally he was very motivated to explain.

"Commercial-grade CPUs generally operate at temperatures between 0c and 70c."

"The operating temperature of industrial-grade CPUs is generally -40c to 85c."

"Certain types of industrial chips such as oil drilling can reach 175c or even higher."

"As for military-grade CPUs, their operating temperatures are generally -55c to 125c."

"Of course, the operating temperature of military-grade CPUs in some specific scenarios is as high as 200C."

"The operating temperature of automotive semiconductors is -40C to 175C, which has exceeded that of general industrial chips and reached quasi-military-grade levels."

"After all, the car needs to ensure that it can be used normally in the cold northern zone, and it also needs to ensure that the parts will not fail when the temperature in the engine compartment is very high."

"These requirements for automotive-grade chips have made the threshold very high."

"Some powerful manufacturers, such as Intel, feel that the production of automotive-grade chips is too troublesome, uses backward technology, and the price is not very high, so they are unwilling to spend too much effort to produce them."

"Although some chip manufacturers want to get a share of the pie, they are not strong enough."

"This leads to car-grade chips, which are very monopolistic."

"It seems that there may be seven or eight manufacturers that can produce automotive-grade chips, but when it comes to a certain segmentation type, it is likely that there are only two or three, or even only one, in the world."

"Nanshan Group wants to develop car-grade chips. Let's not say whether it can be done. The various early investments are very exaggerated."

"Even if it is really successful, we will immediately face competition from the original chip manufacturers. They can make it bigger with lower cost and better quality. No one will use your chip at all."

"Even if you, Nanshan Group, use it yourself, some customers may not necessarily agree to your use."

Obviously, Xiang Changle is not optimistic about Cao Yang's pursuit of chips, and he is still developing automotive-grade chips.

This is definitely more difficult than climbing Mount Everest.

Regardless of the size of Nanshan Group, it has also made some money in the past few years.

But when it comes to chips, it’s not enough.

"Teacher, what you said makes sense. Car-grade chips not only have very high requirements on reliability and other aspects, but also have very strict requirements on the price of the chips."

"Semiconductor companies must meet the extremely stringent certification requirements of OEMs, Bosch and others, and they must be cheap in price."

"This should be the biggest problem faced by domestic chip manufacturers who have never thought about developing car-grade chips."

Cao Yang did not directly refute Xiang Changle.

Not to mention that he was really doing it for his own good, that's why he was so verbose with me.

Even what he said is factual in itself.

Why China is still in a mess with car-grade chips in 2020? The main reason is what Xiang Changle said.

The reasons behind it are really complicated and difficult to change.

It is the domestic self-owned brand automobile companies. On the one hand, they complain that consumers "advocate foreign things" and always like to buy cars from box companies at a premium.

On the other hand, they also like to provide control parts to international manufacturers such as Bosch, Continental, and ZF.

After decades of development, some domestic manufacturers that can produce control parts have finally emerged in China. On the one hand, they complain that independent brand car companies "advocate foreigners" and are unwilling to hand over key control parts such as ECUs. Give them production.

On the other hand, they themselves always stare at chips from Freescale, Texas Instruments, Infineon, STMicroelectronics, and Renesas, and disdain the domestic chips that have finally been developed.

Don’t think that domestic chip manufacturers are wronged. In fact, everyone is not wronged.

Because on the one hand, domestic chip manufacturers are angry that domestic chip designers favor TSMC's technology; on the other hand, they always purchase equipment from major European and American manufacturers such as ASML, and are unwilling to try to purchase equipment from local manufacturers.

This can be said to be an infinite loop.

It's hard to tell who is right and who is wrong.

It can only be said that chips are an industry with high technical content. Now European and American manufacturers have formed a monopoly advantage. If you want to break this situation, you need to make a lot of efforts.

Cao Yang is one of the few people in the country who are willing to challenge this situation.

"Yes, either the reliability cannot meet the requirements, or the chip is very expensive and not competitive in the market at all."

"It's a hopeless outcome anyway. Who are you going to let do it?"

"So, Ayang, if you want to get a chip, the teacher will be very pleased."

"With great power comes great responsibility."

"But I actually hope you think it over carefully and don't fall into the pit on impulse."

"At that time, a huge amount of money was spent and the development speed of Nanshan was delayed. In the end, it was just a mess."

Xiang Changle once again suggested that Cao Yang should be cautious.

Chips, especially car-grade chips, are a huge pitfall!

After entering, there is a [-]% chance that you will become cannon fodder.

"Teacher, my goal is to make Nanshan Group the largest auto parts manufacturer and the largest professional equipment manufacturer in the world."

"Although some materials and equipment still need to be imported from abroad, my goal is to achieve true 100% localization in the future."

"Unless the chip problem is solved, 100% localization of equipment and parts will be a joke!"

"So in this field, even if Nanshan does not enter this year, it will definitely enter in a few years."

"In this case, it is better to prepare early and reduce the difficulty of development in the future."

"Of course, I also know that chips are not that easy to make, and I don't expect any big results in a year or two."

"I will not invest all Nanshan's funds in this field at the beginning. I will just accumulate some technology first and slowly prepare for early development."

Since Xiang Changle thinks about himself so much, Cao Yang will naturally not show off.

Anyway, there is no harm in telling Xiang Changle about my idea.

Even if it spreads, it doesn't matter.

"Do you really want to get a chip?"

Xiang Changle was silent for a moment, and then asked again.

"Yes!"

"I have decided!"

Money is no longer the main object of pursuit for Cao Yang.

At Nanshan's current scale, its annual profits of several billion are enough for his personal squandering.

Earning more money will not make much difference in personal consumption.

As a reborn person, he naturally has some pursuits.

As an engineer who worked in the automotive industry all his life, he has personally experienced that during the short-term period of chips, OEMs "begged" Bosch, Continental and other manufacturers to guarantee supply, and even directly skipped parts suppliers and contacted Infineon, NXP and other chip suppliers. Contact the manufacturer, hoping to get some more teasing supplies.

Even Warwick Company in Shenzhen next door suffered from chip problems...

Cao Yang has a hunch that if Nanshan Group really develops and grows into the world's largest auto parts company and equipment company, then what happened to Warwick Company in the previous life may be experienced by Nanshan Group in this life.

In this case, it is even more necessary to get the chip yourself.

In order to avoid being stuck in the neck, I can only kneel down and kowtow.

That would be too embarrassing for me.

"If you have to go for chips, then I suggest you do it according to the Fabless model first."

"Ok?"

After all, Cao Yang was not a chip professional, so he didn't react for a while.

When Xiang Changle saw Cao Yang's reaction, he knew that he didn't understand.

So he said again: "Twenty years ago, chip design, manufacturing, packaging and testing were generally completed independently by the same company. This model was called the IDM model."

"In the early days, Texas Instruments, Infineon, STMicroelectronics, NXP, etc. all implemented the IDM model. Today, the typical representative of this model is Intel."

“But the threshold for this model was too high and the investment was very large, so starting from the 80s, changes slowly occurred.”

"This new model is one in which design and manufacturing are undertaken by different companies."

"Fabless Design Company, which does not have its own factory, plus chip foundries like TSMC that specialize in providing semiconductor production services, the relationship between the two is similar to the editing and printing in a magazine."

"Compared with the IDM model, the biggest advantage of this division of labor is that it greatly reduces operating costs."

“So many companies that were originally in the IDM model have transformed into the Fabless model.”

"Even established companies like AMD and IBM are selling off their chip factories one after another."

"If Nanshan wants to develop chips, I suggest that you don't build a chip factory yourself first. The investment is too big and it will be difficult to form a technological advantage. There is no hope of forming a technological advantage at all."

Xiang Changle provided Cao Yang with a reference in a very positive tone.

Cao Yang didn't say anything more about this.

He set up a chip factory as soon as he came up. He was not crazy or crazy!

"Teacher, what you said makes sense. Then Nanshan should start with chip design!"

Seeing that Cao Yang accepted his proposal, Xiang Changle breathed a sigh of relief, and then continued: "Even for chip design, I suggest you find some manufacturers to cooperate with."