UK joins global AI chip war

With the emergence of ChatGPT, an artificial intelligence (AI) chatbot, countries around the world have launched a new round of AI competition war. According to a media report on 20 August 2023, the UK intends to spend ￡100 million on thousands of high performance AI chips in order to catch up with other countries in the global race for computing power. According to the report, in order to establish a national "AI research resource," UK government officials have opened negotiations with IT giants such as Nvidia, AMD and Intel to order AI chips. Negotiations with Nvidia, led by UK Research and Innovation, the UK's science funding agency, are at an advanced stage.

US China semiconductor dispute intensifies, Biden will introduce new measures in August to limit technology investment in China

According to Bloomberg, Biden will sign a new presidential decree in mid-August to reduce U.S. investment in China's key technology sectors. The decree will cover sectors such as semiconductors, artificial intelligence, and quantum computing, industry sources said, adding that the new decree will go into effect next year but will have no impact on projects already in place.

The Biden administration has also made stopping China's development a top priority as friction between the U.S. and China over high-tech industries grows. The U.S. media has continued to put the word out that U.S. companies are required to impose more restrictions on Chinese technology and equipment. It is unclear whether the US move is a test of China's response or a signal to its allies to come together and take steps.

U.S. and Chinese commerce ministers held talks, with China expressing serious concerns over a number of issues, including semiconductor policy

On 28 August, Commerce Minister Wang Wentao held talks in Beijing with visiting U.S. Commerce Secretary Raimondo. The two sides focused on the implementation of the important consensus of the Bali meeting between the US and Chinese premiers, and conducted rational, frank and constructive communication on the economic and trade relations between China and the US and economic and trade issues of common concern.

In addition, the two sides launched the Export Control Information Exchange Mechanism (ECEIM) as a mechanism to explain their respective export control regimes and improve communication. The two sides will exchange information on export control in accordance with their respective laws. The two sides discussed and agreed that experts from both countries will conduct technical consultations on strengthening the protection of trade secrets and confidential business information in the administrative licensing process.

Japan Considers Tax Breaks for Domestic Electric Vehicle Battery and Chip Production

Nikkei News, 11 August - Japan plans to introduce tax breaks for domestic electric vehicle (EV) batteries and semiconductors from April 2024 to enhance economic security and support decarbonisation. The move will follow similar industrial policies in the United States and the European Union, which aim to encourage companies to move production back to Japan and promote the energy transition.

U.S. Department of Commerce Removes 27 Chinese Entities from Unverified List

Recently, the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce issued a statement that 33 entities were removed from the Unverified List (UVL), of which 27 are located in China. According to the statement, the decision was publicly displayed on the 21st and came into effect after it was published in the Federal Register on the 22nd.

In recent years, the U.S. side of the export control as a tool of political suppression, for the normal trade of enterprises has brought obstacles and difficulties to the international trade order and the country's friendly relations have a negative impact. In the current international situation, China's semiconductor enterprises need to maintain the stability of their own industrial chain under the premise of independent development as the focus of development, and continue to enhance the competitiveness of enterprises to break through the U.S. sanctions quagmire.

Domestic First Independently Developed CPO Technical Standard Released

On August 1, the official website of China Electronic Industry Standardization Technology Association announced that the first CPO technical standard "Semiconductor Integrated Circuit Optical Interconnect Technical Interface Requirements" (T/CESA1266-2023), which was formally released and implemented, was formulated by Chinese enterprises and experts. It is reported that the standard is China's only CPO technical standards, but also before the China Computer Interconnect Technology Alliance developed Chiplet standard derivative standards, China's integrated circuit industry breakthrough Moore's Law, the layout of technological autonomy of the silicon-optical chip strategy, to achieve the data centre, cloud computing, and artificial intelligence model brought about by the explosion of arithmetic demand effective response, has a milestone significance.

The Ministry of Industry and Information Technology (MIIT) introduced tax reduction policies for integrated circuit enterprises

On 30 August, the Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC), the Ministry of Finance (MOF), the State Administration of Taxation (SAT) and other four departments jointly issued the Notice on the Requirements for the Formulation of the List of Integrated Circuit Enterprises Enjoying the Policy of Value-added Tax Plus and Credit for the Fiscal Year of 2023 (hereinafter referred to as the Notice), which clarifies the (hereinafter referred to as the "Circular"), which specifies the management mode of the work and the conditions for enterprises enjoying the policy.

The list referred to in this Circular refers to the list of IC design, production, packaging and testing, equipment and material enterprises enjoying the VAT plus credit policy mentioned in Cai Shui [2023] No. 17. After the issuance of the list, enterprises included in the list can accrue in the current period together the additive credits and reductions that can be accrued but have not been accrued in the previous period.

Sichuan: push AI chip innovation and development, accelerate GPU R & D applications

On 21 August, the Sichuan Provincial Department of Economy and Information Technology made public the "Sichuan Yuan Universe Industry Development Action Plan (2023-2025) (Exposure Draft)" (the "Exposure Draft") policy document. Among the main tasks, the Exposure Draft wrote, focusing on meta-universe technological innovation, building a new high ground of future science and technology. Focus on 8K ultra-high-definition, near-eye display, flexible display and other key technologies, accelerate the intelligent display-oriented CPU (central processor), GPU (graphics processor), image sensing chip chip and other chip R & D and application, enrich the supply of ultra-high-definition screen, naked-eye 3D, holographic display and other product supply, and promote the development of intelligent display in the direction of high-resolution, low-latency, intelligent and other directions.

Ningxia: Preparing for the construction of AI chip adaptation base, and pushing the construction of basic chip production, learning and research

On 13 August, the General Office of the People's Government of Ningxia Hui Autonomous Region issued the policy document "Promoting AI Innovation and Development Policies and Measures" (the "Measures"). In the fourteenth point of the first measure, it is written that it actively introduces leading domestic server manufacturing enterprises, gives full play to their advantages in the supply chain, integrates digital industry ecological resources, focuses on promoting the construction of server manufacturing, basic chip production, learning and research, and ancillary industries, attracts more computing facility enterprises to join in, fosters the scaling up of computing facilities and clustering, and drives the establishment of the manufacturing chain of servers and their core components to create a localised industrial Ecology.

Zhejiang: Implementing Opinions on High-standard Construction of "China Vision Valley" and High-quality Development of Visual Intelligence Industry

On 16 August, the General Office of Hangzhou Municipal People's Government issued the policy document "Implementation Opinions on High-standard Construction of "China's Visual Valley" and High-quality Development of Visual Intelligence Industry" (referred to as "Implementation Opinions"). The Implementation Opinions put forward in the key tasks, strengthen the innovation capacity, create the first choice of results transfer and transformation, and strengthen the key technology research. Relying on the strength of universities, institutes and research institutions, strengthen basic research on big data intelligence, cross-media perceptual computing and hybrid augmented intelligence. Focus on visual intelligence chips, core devices and other R & D and application, support enterprises and institutions to declare the national science and technology projects and provincial "sharp" "leading geese" project. In terms of support and guarantee policies, the Implementation Opinions re-emphasise the support of key technology research, support the main chain of enterprises to strengthen key technology research, annual R & D investment to reach a certain scale of technology projects to give the corresponding subsidies to support the development and application of new types of special-purpose chips, such as visual intelligence.

China's first commercial reconfigurable 5G RF transceiver chip successfully developed

On 30th August, China Mobile released its core independent innovation "Windbreaker 8676" reconfigurable 5G RF transceiver chip in Beijing. The chip is China's first domestic design based on reconfigurable architecture, can be widely used in 5G cloud base station, skin base station, home base station and other 5G network core equipment in the key chip, to achieve a key breakthrough from zero to one, effectively enhance the degree of autonomy of China's 5G network core equipment.

RF transceiver chip is the "translator" between radio waves and digital signals, just like the human body's five senses to sound and light into the brain nerve signals, is the key device in the 5G network equipment, R & D difficulty, industrial application needs urgent, known as the 5G base station on the "pearl! It is called the "pearl" on the 5G base station.

According to TechInsights' forecast, China's chip market will recover slowly

As the global IC market recovers after 2024, the combined value of foreign and Chinese IC makers in China will grow from 18.2% of China's IC market in 2022 to 26.6% in 2027, according to TechInsights.

According to the latest data on China's chip imports and exports, it is starting to warm up. in the first seven months of 2023, China's imports of integrated circuits (ICs) totalled 270.2 billion units, down 16.8 per cent year-on-year, and showing a modest improvement despite stricter trade restrictions imposed by the US and its allies.

Chip imports in the first half of the year fell 18.5 per cent year-on-year, while chip imports in the first three months were down 22.9 per cent year-on-year.

Data released by the General Administration of Customs (GAC) showed that China imported 42.4 billion integrated circuits in July alone, up 2.6 per cent from a year earlier.

The data comes as China's domestic chip market is slowly recovering from low consumer demand and various economic headwinds.

HBM Chip Demand Explodes, Supply Tightness Expected to Continue for Next Two Years

As ChatGPT explodes in popularity, driving a surge in demand for AI servers, AI-aligned HBM high-bandwidth memory chips are seeing counter-trend growth and rising prices. According to TrendForce research data, HBM memory chip demand is expected to grow 58% annually in 2023, and will continue to grow more than 30% in 2024.

Demand for HBM memory chips has exploded, and the three major memory chip giants, Samsung, SK Hynix, and Micron, are shifting more capacity to the production of HBM memory chips, but because it takes time to adjust capacity, it is difficult to rapidly increase HBM memory chip production, and HBM memory chips are expected to remain in tight supply over the next two years.

Emerging application scenarios are emerging rapidly, and advanced packaging downstream applications are extensive

With the rapid rise of 5G communication technology, Internet of Things, big data, artificial intelligence, visual recognition, automatic driving and other application scenarios, the application market has a higher and higher demand for chip function diversification. Advanced packaging is widely used in high-end logic chips, memory, RF chips, image processing chips, touch chips and other fields.

According to Yole's forecast, the fastest-growing application markets for system level packaging in the next five years will be wearable devices, Wi-Fi routers, IoT IoT facilities, and telecoms infrastructure. In particular, with the promotion and popularisation of 5G communications, the demand for Flip Chip Ball Grid Array (FC-BGA) system level packaging chips in 5G base stations will rise significantly, and the CAGR of the system level chip market size for base stations is expected to grow as high as 41% in the next five years.