Burning out tens of billions in three years and shutting down for two and a half years, Chengdu GF may be taken over by Korean companies and will switch to DRAM memory chips

The Chengdu GF factory, which has been shut down for two and a half years, finally waited for a taker.

According to Jiwei.com, a new company with former SK Hynix vice chairman Choi Jinseok (CHOI JINSEOG) as the corporate legal person will take over GF and build a DRAM production line on this basis.

According to the company’s investigation, the new company, called Chengdu Gaozhen Technology Co., Ltd., was incorporated on September 28 this year with a registered capital of 5.109 billion yuan. The company currently has two major shareholders: Chengdu semiconductor Manufacturing Co., Ltd. invested 3.065 billion yuan, holding 60% of the shares, which is affiliated to Chengdu High-tech Industrial Development Zone, and Zhenxin (Beijing) Semiconductor Co., Ltd., in which Cui Zhenshi serves as the legal person and executive director Contributed 2.043 billion yuan, holding 40% of the shares, the company was established in November 2019.

There are currently two shareholders: Chengdu Semiconductor Co., Ltd. invested 3.06546 billion yuan, holding 60% of the shares; Zhenxin (Beijing) Semiconductor Co., Ltd. invested 2.04364 billion yuan, holding 40% of the shares.

Zhenxin Semiconductor currently has 230 core technicians. In addition to Choi Jinseok, there are two generals, SK HAN and YH KOH, who serve as COO and CTO respectively.

Among them, SK HAN has 35 years of experience in the semiconductor industry, and served as the head of 9Line PJT of Samsung’s manufacturing department and the head of SK hynix’s M8/M9 manufacturing department. YH KOH was the GM of SK Hynix’s NAND/Mobile&Graphic DRAM development department.

According to industry insiders, Hi-Tech, a joint venture between TrueCore Semiconductor and the Chengdu government, will take over the 7 billion yuan factory built by the Chengdu government for the GF Chengdu plant, and build a DRAM production line on this basis.

1

What is the origin of Choi Jin-seok, the vice president of SK Hynix, who took over the order?

It is said that the legal representative of Gaojin Technology who will take over the order is Cui Jinseok, the former vice president of SK Hynix. He once led his technical team to bring SK Hynix back from the brink of death within two years, and its R&D capability has been improved to the same level as Samsung. It is a South Korean company. One of the veterans in the semiconductor field, with strong strength.

In addition, people familiar with the matter revealed that Choi Jinseok has been in China for many years.

In an interview with domestic media in 2018, he said, “The Korean semiconductor industry has felt China’s progress. Although Korean companies are larger and have stronger comprehensive technical strength, China’s pace is obviously faster.”

In 2019, Choi Jinseok established True Core (Beijing) Semiconductor Co., Ltd. in China. According to the company’s data, Zhenxin has applied for 43 patents related to wafer manufacturing. All technologies are jointly developed by Zhenxin Semiconductor and Chinese Academy of Sciences Microelectronics. Two of the patents are directly related to DRAM chips.

At present, after rumors that a new taker is about to appear, the industry is waiting to see whether Chengdu GF can really usher in a new life.

2

The ten billion project is unfinished, how did Chengdu GlobalFoundry fail?

Before Wuhan Hongxin, which planned to invest 100 billion yuan, revealed that it might be unfinished, Chengdu GlobalFoundry was once considered to be the largest factory “corpse” in the industry.

Headquartered in California, Global Foundries is currently the third largest semiconductor foundry in the world, after TSMC and Samsung Electronics.

GF used to belong to AMD (AMD), and then became independent in 2009 when AMD spun off its chip production business, and was acquired by the Abu Dhabi government’s sovereign fund Mubadala Investment Co (Mubadala for short) acquired and became its subsidiary.

In the past ten years, Mubarda has invested more than 21 billion US dollars to establish and expand semiconductor production lines in Europe and the United States, and the production capacity of GF has been further expanded.

As a wafer manufacturer that can rival TSMC and Samsung, GF will naturally not miss China’s big cake.

Chengdu GF was born in the upsurge of second-tier cities across the country competing for the chip industry.

In 2014, the state issued a policy to encourage the development of the integrated circuit industry, and in the autumn of that year, the first phase of the National Integrated Circuit Industry Fund was established. Local governments have begun to invest heavily in the layout of the chip industry, hoping to seize the next industrial outlet.

At that time, the world’s major chip manufacturers TSMC, GF, and UMC all came to mainland China to seek cooperation. When Nanjing has TSMC and Xiamen has UMC, Chengdu, a new first-tier city in the central region, is not far behind.

In May 2017, GF announced the construction of a 12-inch wafer fab in Chengdu, with an estimated investment of over US$10 billion, making it the first 12-inch wafer production line in the southwest of the mainland.

The total investment scale of GF Chengdu has accumulated more than 10 billion US dollars. The Chengdu government has invested 7 billion yuan in the construction of GF’s factory, which is responsible for the plant, supporting construction and the formation of R&D, operation and logistics teams.

In the original blueprint, the first phase of Chengdu GF launched a less advanced 0.18-micron process, but it was clearly a 12-inch factory instead of an ordinary 8-inch factory. It is expected to be put into production by the end of 2018; The 22nm SOI manufacturing process is expected to be put into production in the fourth quarter of 2019. The products are widely used in mobile terminals, Internet of Things, smart devices, automotive electronics and other fields.

But unexpectedly, none of these ideas came true.

In October 2018, GF announced that it had signed an amendment with Chengdu to cancel its investment in the first phase of the project.

In February 2019, it was reported in the industry that the GF Chengdu plant had been shut down, the internal equipment of the plant had been cleared, and the requirement for employees to leave the company had changed from “returning training fees” to “no need to return training fees”, just like a disguised form. Encourage employees to leave.

On May 17, 2019, Chengdu GlobalFoundries issued three “Notices on Human Resource Optimization Policies and Suspension of Work and Business”. In the notice, Chengdu GF said, “In view of the current state of the company’s operations, the company will officially suspend work and business from the date of this notice.”

However, the closure of the Chengdu GF factory is inseparable from its parent company.

In the ten years that Mubadah took over, GF has been in a state of loss, and the helm has been changed frequently, and four CEOs have been changed in ten years.

In addition, different from the FinFET process used by most wafer manufacturing companies, GF chooses the FD-SOI process, but the development of the FD-SOI process is limited by the imperfect ecosystem. In terms of IP construction, mass production experience and application promotion Neither was satisfactory. The research and development of chip technology requires top-notch technology and strong financial support.

On a technical level, GF has actually been in a state of catch-up, which has also made its wafer fabrication difficult.

The wafer fab has a large investment scale, a long investment cycle, and a long payback period, which is a high-risk industry. The return period of the wafer factory is very long, and it is often calculated in ten years. I am afraid that it will not be able to recover the cost for many years.

Therefore, the technical immaturity makes the fall of the Chengdu GF factory an inevitable event.

It is worth noting that similar unfinished plots are not new in China. Wuhan Hongxin, Nanjing Dekema and Dehuai Semiconductor have all become cannon fodder.

In the domestic chip investment boom, the emergence of a number of zombie factories is unavoidable in the current “surfing mode”. But we need to face up to the technological gap with many developed countries, looking up to the sky and keeping our feet on the ground. If you shout slogans blindly, at the end, maybe it will be a colored bubble.

This quote from Huawei President Ren Zhengfei also applies:

Making chips is not about making mud balls, it cannot be done overnight. This process involves technologies in various fields, as well as some raw materials, all of which take time to obtain. At present, some people’s research and development of chips is actually exaggerated hype, the purpose is to make money in the secondary market.

It’s still the same sentence: “Key core technologies cannot be obtained, bought, or negotiated.”

  

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