Friends of the Huaqiang Lecture Hall, it’s great to see you all again. My surname is Song—though many new friends often mix it up and think my name is Kinghelm, which is actually my company’s English name. The Huaqiang Lecture Hall has always been a place for ideas, learning, and meaningful exchange. This is my third time speaking here. The first time, I talked about Kinghelm’s GPS and BeiDou antennas and navigation modules; the second time, I introduced Slkor’s silicon carbide technology. As someone jokingly known as a “street economist” in Huaqiangbei, and as an entrepreneur who has struggled—sometimes even selling property to keep investing in the integrated circuit industry—today I want to share my thoughts on “The Road to Domestic Semiconductor Development.”
In 2020, as the global pandemic raged and the strategic competition between China and the United States intensified, integrated circuits stood at the very center of attention. In the information age, chips are as essential as food. Under such pressure, the question we must face is simple yet profound: how can we grow our own “grain” and achieve self-sufficiency in this critical field?
Mr. Song Shiqiang of Kinghelm during a live broadcast
To explain this journey, I began by outlining the global landscape of the semiconductor industry. Broadly speaking, the world can be divided into three major blocs: the United States; Europe, Japan, South Korea, and Taiwan; and China. This structure defines today’s international division of labor in integrated circuits.
From there, I turned to the current state of domestic development. Across the entire value chain—materials, manufacturing processes, design, talent, industrial software tools, and sales—we must carefully examine where we stand and what gaps remain. Each link reveals both progress and challenges.
I also shared a SWOT analysis to provide a more complete picture of China’s semiconductor industry. By looking at strengths, weaknesses, opportunities, and threats, we can better understand the realities we face and the direction we need to take.
Finally, I spoke about the future. My belief is simple: after hardship comes glory. This is not just optimism—it is a pattern seen throughout history and nature. China entered the integrated circuit field relatively late and now faces external pressure, so difficulties are inevitable. We transitioned from a semi-colonial, semi-feudal agricultural society into the information age in a relatively short and uneven way. Traditionally, more emphasis was placed on social sciences than natural sciences, and we lack the long accumulation of scientific thinking and industrial experience seen in the West. Our time in a fully developed industrial society has been brief, and our industrial system is still maturing.
If oil and steel were the “food” of the industrial age, then integrated circuit chips are the staple of the information age. The gaps we must close are significant, and the challenges are real. Yet the Chinese nation has always been defined by resilience and perseverance. Over five thousand years of both hardship and achievement, we have continually moved forward. The determined efforts of those working in the semiconductor industry today—cutting through obstacles and building from the ground up—reflect the enduring spirit that adversity can ultimately strengthen a nation.
The Global Landscape of Semiconductors
When discussing the international semiconductor landscape, we must start with the United States. It stands as the world’s sole superpower, and this dominance manifests in three main ways.
First is the control over technology and industry standards. In the past, wars were fought over land, resources, and survival. Today, we are in “War 3.0,” where the battleground is markets, talent, and profit. The U.S. secures its advantage by setting cutting-edge standards, holding patents, and creating a framework where other countries and companies must follow its lead. This was evident in the intense competition over LoRa and 5G standards between Huawei and Qualcomm, where even Lenovo was criticized for siding with American standards. In essence, controlling technology standards today is like holding the high ground in traditional warfare—it gives strategic leverage.
Second is the U.S.’s comprehensive strength in fundamental research, materials, processes, talent, innovation, and institutional systems, including education. More than half of the world’s top 30 universities are in the U.S., with MIT, Stanford, Berkeley, and Harvard leading in research and talent cultivation. Bell Labs and Lucent pioneered in materials science, theoretical research, and industrial innovation. Foundational research in mathematics, physics, and chemistry fuels technological breakthroughs—it is, metaphorically, the “seeds” of industry. Major U.S. tech outputs like Google’s Android OS, Microsoft Windows, and Oracle’s SaaS systems are used worldwide, shaping global markets. The U.S.’s free and innovation-driven environment has nurtured companies like Apple, IBM, Microsoft, Tesla, and Amazon, alongside the high conversion of Silicon Valley innovation and Wall Street capital into industry. These collectively form the backbone of technological supremacy.
Mr. Song of Kinghelm answering audience questions
Third is the completeness of the high-end industrial chain. I once had a long discussion with Professor Zhou Zucheng of Tsinghua University about this. A complete chain requires both a research-industrial chain and an industrial-production chain. China demonstrated remarkable supply chain capability during the pandemic—for instance, quickly scaling mask and ventilator production—but research on vaccines and detection materials lagged far behind, revealing gaps in fundamental R&D compared to the U.S. High-end U.S. products, like Apple’s design, technology, branding, and distribution, remain primarily in America, while China focuses on assembly and logistics. Beyond industry, the U.S. protects its tech dominance with military, financial, and media influence, along with the global reach of the petrodollar system—a complex strategic web.
Turning to America’s allies in Europe, Japan, and South Korea: Europe largely aligns with the U.S., maintaining a complementary and competitive relationship. Companies like ARM (UK), Infineon (Germany), STMicroelectronics (Italy/France), and NXP (Netherlands) dominate specialized fields. Notably, ASML in the Netherlands leads in EUV lithography, with products so in demand that TSMC and Samsung scramble for them; orders placed by SMIC in 2018 still haven’t been fulfilled.
Japan and South Korea form the second tier, heavily reliant on U.S. support. Japan once led in semiconductors in the 1980s, but U.S. sanctions and strategic pressure pushed it to focus on precision silicon wafers, photoresists, ceramics, and specialty gases. South Korea, led by Samsung, developed its massive memory sector with national-scale investment, later expanding vertically into the broader semiconductor ecosystem. Samsung alone contributes roughly 40% of South Korea’s GDP, while SK Hynix and LG Chemicals also hold strong market positions.
The new products of Hall sensors from Slkor
Taiwan’s foundry sector surpasses mainland China in some aspects. TSMC, with legendary founder Morris Chang bringing talent from the U.S., has become a world leader in neutral wafer manufacturing, serving clients like Huawei, Apple, Intel, and NVIDIA. UMC follows closely, and a vibrant IC design ecosystem exists around Hsinchu, with companies like MediaTek, Novatek, and Realtek holding niche strengths.
As for mainland China, after the third global technology and industrial transfer, we began with simple manufacturing and gradually developed toward a full industrial chain. Initially focusing on labor-intensive and low-end production, we are moving toward higher-tech, higher-margin, and environmentally friendlier sectors. The U.S. views this evolution cautiously, while lower-end industries shift to neighboring countries—Vietnam taking part of Samsung’s production, some assembly and passive component factories moving to the Philippines or Malaysia—marking the fourth wave of industrial transfer.
Chinese manufacturing is also evolving from manual assembly lines to automated, intelligent production. OEMs are transforming into ODMs, shifting from basic processing to integrated development encompassing R&D, design, branding, and channels. The demographic advantage is transitioning into a talent advantage: roughly eight million university graduates enter the workforce annually, equipped with systematic education and practical experience, forming a high-quality labor pool for China’s industrial ambitions.
Major Events in Recent Years
Let me share some of the major developments in the semiconductor industry over the past two years. The first is the U.S.’s clampdown on ZTE and the collapse of Fujian Jinhua; the second is the multi-round, full-spectrum strategic game between China and the U.S.; and the third is the coordinated pressure on Huawei, where the company has shown remarkable resilience—bruised, but not broken.
After President Trump took office, the U.S. government in April 2018 banned the sale of semiconductors to ZTE. Following negotiations, ZTE was fined $1 billion, placed under compliance supervision, and required to adjust key management positions to pass the U.S. regulatory requirements. In October, Fujian Jinhua was added to the U.S. export control entity list, blocking access to high-end IC equipment containing American intellectual property. Billions already invested in infrastructure and equipment became essentially useless. By December, Taiwanese partner UMC, under pressure, withdrew all DRAM engineers, leaving Jinhua without technology, equipment, or talent—effectively ending the company.
The second major development was the ongoing China-U.S. strategic game. Though called a “game,” in reality, it involved repeated U.S. attempts to suppress China. For instance, the 1996 Wassenaar Arrangement led by the U.S. and Europe restricted the export of high-end equipment and technology to China. At SLKOR, our main products are silicon carbide MOSFETs, which require two critical high-end devices—high-temperature annealing and high-voltage ion implantation—that Chinese companies cannot purchase. Local peers in Beijing had to rely on second-hand equipment, which was largely unusable. The U.S. also invoked Section 301 of its trade law to investigate any perceived violations of dumping or technology rules, giving it the authority to suppress companies threatening its interests. Essentially, whoever challenges U.S. interests risks intervention, with the U.S. holding interpretive power and exercising “long-arm jurisdiction” across the Pacific.
SMIC, China’s leading foundry, repeatedly faced such pressure. Dr. Zhang Rujing, its founder, left under TSMC-related suppression. Professor Zhou Zucheng reminded me that these pioneers dedicated themselves fully to China’s semiconductor development. Later figures like Jiang Shangzhou, Qiu Ciyun, Liang Mengsong, and Zhao Haijun are national heroes, and their stories deserve to be written and celebrated. Other companies, such as Huajing, Huahong, and Wuhan Xinxin, encountered similar challenges during their growth.
Mr. Song of Kinghelm during a live broadcast
The third major event is the encirclement of Huawei. To put it simply, Huawei’s founder Ren Zhengfei is like a diligent farmer from Guizhou, cultivating communications technology with seeds, fertilizers, and tools imported from the West. Huawei not only cultivated Chinese fields but also helped foreign companies, earning more than the seed and tool suppliers themselves. This aggressive expansion alarmed Trump, who perceived it as a direct threat. In December 2018, Canada, following U.S. requests, detained Huawei CFO Meng Wanzhou. Though released on bail, she remained restricted from travel, facing potential extradition—a clear pressure on Huawei’s core leadership. Meanwhile, Huawei was barred from the U.S. smartphone market, and countries like the UK, India, and Australia restricted Huawei 5G products amid unfounded security fears. By May 15, 2019, the U.S. prepared a total supply cutoff for Huawei, moving from a partial restriction on U.S.-origin technology to a full ban.
Huawei represents the pride of Chinese technology and the nation itself. A private company carrying the banner of China’s semiconductor and global information development is truly extraordinary. We must applaud their resilience. We believe Huawei will overcome these obstacles, with the full support of China’s domestic ecosystem. We hope more companies like Huawei emerge, forming teams and ranks to advance toward the world’s highest technological peaks, driving China’s development and prosperity. Ren Zhengfei, stay strong! Huawei, keep going!
Benchmarking Against Leading Companies
How are Chinese companies faring compared to their global counterparts? Let’s take a closer look through materials, EDA tools, IDM and Fabless, Foundry, packaging and testing, and sales channels.
Starting with materials, the key is silicon wafers, which require extremely high purity and precision—they form the foundation of integrated circuits. Japan’s Shin-Etsu and Sumco, Taiwan’s GlobalWafers, and Korea’s LG are far ahead of us. On the domestic front, Shanghai Xinsheng, Chongqing ChaoSic, Ningxia Yinhe, and Shandong Tianyue show promise, but there is still a long way to go in technology, quality, and large-scale supply. Supporting materials like frames, targets, packaging substrates, and polishing compounds have smaller gaps, but photoresists and silicon carbide (SiC) materials lag far behind. A few years ago, SLKOR (www.slkormicro.com) attempted to produce domestic SiC material replacements, but multiple trials failed, and we ultimately had to revert to Corning’s epitaxial wafers from the U.S.
EDA software is another critical tool for IC design. Early this morning, I consulted Professor Zhou Zucheng from Tsinghua University, a leading expert in EDA. Globally, the main EDA tools—Synopsys, Cadence, and Mentor—are largely U.S.-controlled, covering about 80% of the market. Mentor, sold to Germany in 2016, still retains American roots. Domestically, Huada Jiutian leads, alongside Tsinghua-affiliated startups like Boda Micro (merged into Galen Electronics), Okas Micro, and Xinhe. Chinese EDA tools hold only about 5% of the market, but that leaves substantial room for growth.
SLKOR MOSFETs
Next are IDM and Fabless companies. IDM, or vertically integrated companies, handle everything from raw materials to packaging and sales, with Samsung, Intel, TI, ADI, and Nvidia as global examples. In China, Silan Micro is a representative. Fabless companies focus on design without owning fabs. GD Zhiyin, UNISOC, Huawei HiSilicon, and Will Semiconductor are notable domestic players. Zhiyin’s MCUs are excellent, though core IP still relies on ARM. Recently, Zhiyin partnered with Nuclei Tech to explore RISC-V architecture, a promising path. UNISOC, under Zhao Weiguo’s leadership, consolidated Spreadtrum and RDA, showing the power of Chinese capital. Huawei HiSilicon ranks among the world’s top ten IC designers, mostly using U.S. EDA tools, proving the company’s exceptional capabilities. Will Semiconductor also excels in R&D, acquisitions, and building a robust tech ecosystem.
Mr. Song of Kinghelm during a live broadcast
Foundries are pure wafer processing companies. Globally, leaders include Samsung, TSMC, GlobalFoundries, and UMC. Domestically, SMIC, backed by state capital and high-end talent, is steadily catching up and can now mass-produce 14nm products. Recently, Wuhan Xinxin achieved breakthroughs in memory technology, approaching international levels. Early joint ventures with Japan, such as Huahong Hongli and China Resources Shanghai Huahong, continue contributing to IC development. Foundries in China still require sustained, large-scale investment.
Packaging and testing is a segment where China is close to global parity and even locally leading. Key international players include Amkor in the U.S., UTAC in Singapore, Nepes in Korea, and Unisem in Malaysia. In China, JCET leads the way, growing through internal effort and strategic acquisitions to become the world’s largest. Tongfu Microelectronics and Huatian Technology are also strong contributors.
SLKOR IGBT single device
Sales channels include major distributors, booming e-commerce platforms, and spot traders who sustain countless entrepreneurs in Beijing’s Zhongguancun and Shenzhen’s Huaqiangbei. U.S. leaders like Arrow and Avnet, and Taiwan’s WPG dominate globally. Digi-Key leads e-commerce with $3.25 billion in sales, followed by Mouser and Future Electronics. Domestic counterparts, such as China Electronics Port and Huaqiang Group, report annual sales exceeding 10 billion yuan, while Taikoyuan continues climbing. Though they may lack core technological control, their strong customer networks grant significant influence. Local e-commerce platforms like LCSC, Yunhan, and Liexin, managed by familiar colleagues, are rapidly advancing, comparable to Digi-Key. Our Kinghelm GPS/Beidou antennas (www.kinghelm.net) and SLKOR MOSFETs (www.slkoric.com) have also benefited from these networks. Huaqiangbei’s traders not only serve SMEs but also act as warehouses and distribution hubs, ensuring the electronic component ecosystem thrives. Personally, I enjoy sharing IC knowledge and stories with these entrepreneurs—useful, fun, and never tiring (stay tuned for the next chapter).
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