Electronic Enthusiasts Network reported (text / Mo Tingting) In recent years, under the guidance of national policies, the semiconductor industry has developed rapidly. Domestic semiconductor manufacturers have continuously improved their technical level and R&D capabilities, and have achieved domestic substitution in some application fields. The increase in the share of domestic semiconductors illustrates the process of domestic substitution from the side.
According to data from the International Semiconductor Industry Association, as of the end of 2021, the global semiconductor market has reached 555.9 billion US dollars, a year-on-year increase of 26.2%; China’s integrated circuit sales exceeded one trillion yuan, reaching 1,045.83 billion yuan, a year-on-year increase of 18.2%. From the import and export data, in 2021, the import value of China’s semiconductor industry will reach 462.3 billion US dollars, and the export value will be 202.6 billion US dollars, showing a trend of increasing year by year.
So, in terms of domestic substitution, how is the domestic progress, and where are the future opportunities? Dai Weimin, chairman of VeriSilicon, mentioned three major aspects. First, the next five years will be the key five years for domestic replacement; second, if “domestic replacement” cannot be achieved within five years, it will be “replaced domestically” after five years, which will increase the difficulty; The third is that simple domestic replacement is basically completed, and it is moving towards deep-water areas such as CPU, GPU, and high-performance computing.
However, for chip design companies, they still need to face the problem of R&D investment. It is understood that the R&D investment of the world’s top 10 leading chip design companies accounts for about 20% of their revenue. How to reduce the proportion of R&D investment to below 20%-15%? Dai Weimin believes that there are two ways, one is to provide semiconductor IP, and the other is to provide chip design services.
In terms of semiconductor IP licensing, VeriSilicon’s IP intellectual property licensing fee revenue ranks fourth in the world, with revenue of 94.5 million US dollars in 2021, a year-on-year increase of 29.6%. In the first half of 2022, the company’s semiconductor IP licensing business revenue increased by 70.61% year-on-year, of which intellectual property licensing revenue increased by 78.94% year-on-year, and royalty revenue increased by 29.20% year-on-year. VeriSilicon believes that with first-class IP design capabilities, the first batch of Chiplet companies can be launched, and corresponding landing scenarios such as tablet computers and autonomous driving can be found.
It is understood that VeriSilicon GPUIP has been deeply cultivated in the embedded market for nearly 20 years, and has been adopted by customers in various market fields such as automotive electronics, wearable devices, and PCs. Among them, VeriSilicon 2DGPU can achieve 3D effects, and 2.5DGPU is used in wearable products, such as smart watches, MCUs supporting display functions, etc.
Compared with the stock market, the incremental market can bring about faster growth. So, where is the next incremental market? Dai Weimin thinks it will be AR glasses. AR glasses are mainly used for real-time translation, social media notifications, and can also provide information for vertical applications such as warehouse management and field service. Just in May of this year, at Google’s 2022 I/O developer conference, Google revealed the details of a new generation of AR smart glasses. As soon as the news came out, the product was considered to be the strongest translation glasses that Google would build. Focused on improving lifestyles, the new Google smart glasses can use AI for real-time translation and have better battery life.
“They are (created) a kind of thing that replaces the smartphone + wireless bluetooth earphone. With this, you will take less mobile phone, just like having a mobile phone and less opening a PC. But the glasses must be more like glasses, not too heavy, It can’t get hot or hot, and it can’t be taken off and charged frequently, which means it has independent computing and power supply functions.” Real-time translation is an important function of AR glasses, but more importantly, social interaction, such as in industrial application scenarios, AR smart glasses It will remind you how to go next. What the user has not seen yet, the AR smart glasses have already seen it. Dai Weimin said that Google has launched AR glasses 10 years ago, but the next three years will be the inflection point of the outbreak.
It is worth noting that AR/VR is also the entrance to the metaverse. According to IDC data, the total global AR/VR investment scale in 2021 is nearly US$14.67 billion, which is expected to increase to US$74.73 billion in 2026, with a five-year compound growth rate (CAGR) of 38.5%. Among them, the five-year CAGR of the Chinese market is expected to reach 43.8%, ranking first in the world in terms of growth rate.
The data shows that the AR/VR market will grow at a compound annual growth rate of 60% between 2021 and 2026, and the shipments will exceed 80 million, of which AR smart glasses may account for 27%. IDC predicts that the scale of IT-related spending in China’s AR/VR market in 2021 will be approximately US$2.13 billion, and will increase to US$13.08 billion in 2026. This is a broad market and an incremental market visible to the naked eye.
Semiconductor IP technology and chip customization technology are in the upstream of the integrated circuit design industry and will play an important role in the development of the AR smart glasses industry. VeriSilicon stated at the investor relations event that the company will maintain the growth rate of investment in research and development in the future, and carry out research and development layout according to the development strategy to achieve leapfrog development in the future. Today, VeriSilicon graphics processor GPUIP has been used in many fields such as wearable devices, and will also be widely used in the AR smart glasses market in the future.