25 Mar
2021

Sector deep dive: Semiconductors

China’s lack of a formidable chip player is well known and has left the country relying on overseas technology. Last year, for instance, US giant Qualcomm received special dispensation from the US government to supply 4G chips to Huawei. The Chinese tech leader has effectively been banned from the US market and heavy restrictions have been placed on the company in terms of acquiring overseas technology.

Elsewhere, Intel boasts a formidable portfolio, as do TSMC and Samsung – two leaders in chip manufacturing. With the industry undergoing a period of consolidation, including through Nvidia’s proposed acquisition of ARM from Softbank, the Chinese government and nascent players in the space have much to consider.

There is a lot at stake in the Nvidia deal. A group of high-tech businesses including Qualcomm, Microsoft and Google have voiced their concerns about the purchase going through. The proposed tie-up is also the subject of close scrutiny by UK competition authorities. China’s position on the matter remains unclear, but it may not be smooth sailing for Nvidia given current geopolitical tensions.

As Huawei’s struggles indicate, China is already feeling the effects of sanctions that saw its chip supply cut off by the Trump administration. Losing access to ARM’s design is something that the country will want to avoid at all costs. As such, it will not want a US firm calling the shots. Therefore, it would be a surprise to many if Chinese regulators were to wave it through.

Nvidia notched up a notable success previously when it received approval from the Chinese government for the acquisition of Mellanox. In that scenario, the company pushed the fact that the patent portfolios were complementary.

Nvidia for its part is trying to address possible regulatory concerns over the ARM deal. It has promised to keep its target headquartered in the United Kingdom and has invested in an AI research unit in Cambridge. ARM’s intellectual property will also remain registered in the United Kingdom.

In an interview with EETimes, Nvidia claimed that the Chinese government will approve the deal since it does not intend to change the structure of the ARM joint venture in the country. No matter what Nvidia does to put regulators at ease, it is going to be a long, drawn-out battle to obtain approval and convince foreign governments that the deal poses no threats.

Table 1. Semiconductor players from top 100

Company nameChinese grants (patents only)Country of origin
Qualcomm10,756United States
Semiconductor Manufacturing International Corporation6,842China
Intel6,496United States
TSMC5,506Taiwan
Murata Manufacturing3,974Japan

While China is struggling with its lack of a chip arsenal, it is trying to catch up through the use of the open-source RISC-V foundation. (Interestingly, the foundation relocated its headquarters from the United States to Switzerland to avoid the export clause complications imposed by the Trump administration.) One example is Alibaba’s use of the RISC-V processor design in its Xuantie 910 or XT 910 – a 16 cores, 64-bit, 2.5GHz, 12nm, out-of-order execution, multi core processor that can be used in edge servers. Possible use cases include IoT areas that require high-performance computing such as 5G, AI, networking, gateway and self-driving cars.

In a nutshell, China is doubling down on its efforts to catch up in the semiconductor space. RISC-V solves only a part of the problem, as many Chinese players remain reliant on foreign technologies.

It may take Chinese companies a few years to achieve in-house manufacturing capabilities to match the likes TSMC. However, the country’s resilience is reflected in its never-ending innovation machinery.

Table 2. Semiconductor technology trends

Top trendsTop playersActive grantsTop players 2019-2020Active grants 2019-2020Key areasOther key players

Wireless communication devices

Qualcomm2,013Qualcomm777

Signal allocation devices, wireless downlink, resource management, wireless transmission/communication networks, wireless synchronisation arrangements, wireless communication access and security, power management devices, traffic management devices, multiplexing

Huawei, LG Corp, ZTE, Samsung

Intel747Intel360
Semiconductor devices and transistorsTSMC1,319TSMC486Semiconductor and bipolar junction transistor types with varied current flow, drain region manufacturing in semiconductor devices, field effect transistors with insulated gates MOSFET transistors, galvanomagnetic semiconductor devicesSamsung, IBM
Semiconductor Manufacturing International Corporation733Semiconductor Manufacturing International Corporation430
Intel299Intel110
Murata Manufacturing256Murata Manufacturing110
Qualcomm173Qualcomm66
Power management and storage devicesInfineon Technologies131STMicroelectronics59Storage devices and chips, power management devices, AC-DC/DC-AC/DC-DC convertors, boost circuit multipliers, capacitive circuitsToyota Motor, Mitsubishi Electric
STMicroelectronics99Infineon Technologies40
Qualcomm88Texas Instruments38
TSMC87Qualcomm37
Texas Instruments65TSMC24