Is the 128 billion yuan investment project unfinished?The huge market of “industrial grain”, why companies have collapsed

Integrated circuits, often referred to as chips, are also known as “industrial grains”. They are the core components of all Electronic products with extremely high technical content. This allows many domestic enterprises to see the huge potential market and launch related projects one after another.

However, since the beginning of this year, many integrated circuit projects have been exposed to problems in many parts of the country, and there is a risk of stagnation or even unfinished construction. What’s going on here?

1 Wuhan Hongxin “falls into” the suspension of the 100 billion investment project and encounters financial difficulties

Wuhan Hongxin semiconductor, with a total planned investment of 128 billion yuan, is an integrated circuit project newly built in Hubei Province in the past two years. It has been listed as a major under-construction project at the provincial and municipal levels.

However, in November this year, when the reporter came to the construction site, he found that, except for the top of the main production workshops in the first phase of the project, from the perspective of personnel and tower crane equipment, the project has been suspended.

In the temporary office space of the construction site, the reporter saw more than a dozen staff members. But when the reporter expressed his intention to inquire about the current situation of the company, he was rejected.

As can be seen from the official website of Hongxin, the company established in November 2017 aims to build logic process production lines of 14 nanometers and below 7 nanometers successively to produce chips for mobile phones, Internet of Things and in-vehicle devices.

In July this year, Dongxihu District of Wuhan City officially released a report, saying that the Hongxin project has a large funding gap and faces the risk of project stagnation due to a break in the capital chain at any time, but the report can no longer be found on the official website.

In addition, the CEO hired by Hongxin last year, Jiang Shangyi, a key figure who had worked in the industry’s leading company TSMC, also issued a statement through a law firm saying that he submitted his resignation in June 2020 and would no longer participate in any Hongxin. Project operation.

The reporter learned that in fact, before the impact of the epidemic this year, the funding gap of Wuhan Hongxin had already appeared. According to the information from Tianyancha, in November 2019, Wuhan Hongxin was sued by the subcontractor Wuhan Huanyu Foundation Engineering Co., Ltd. for defaulting on the project payment; in January 2020, Hongxin used a newly purchased lithography machine as a mortgage, Loans of 581.8 million yuan from banks.

Industry and commerce information shows that in the initial registered capital of Wuhan Hongxin, the major shareholder Beijing Guangliang Blueprint subscribed for 1.8 billion yuan, but the actual payment was only 1 million yuan. When reporters tried to find the company, its registered address was just a small yard where people lived.

In addition to the blueprint of Beijing Guangliang, another shareholder of Hongxin at that time was a company held by state-owned assets in Dongxihu District, Wuhan City, with a subscription of 200 million yuan and an actual payment of 200 million yuan. In the last month, Hongxin has been 100% controlled by another wholly state-owned enterprise in Dongxihu District of Wuhan, and the management has also been completely replaced. This means that the project has now been fully taken over by local state-owned assets.

2 The capital chain is broken and Nanjing Dekema enters the bankruptcy liquidation process

During the investigation, a CCTV financial reporter learned that integrated circuit projects such as Wuhan Hongxin, whose construction has been suspended due to funding gaps, are not isolated cases in China. In Nanjing and Huai’an in Jiangsu, two similar projects led by Taiwanese project teams also had problems. At present, the local government is trying to revitalize the project through restructuring.

Dekema Semiconductor is the first wafer fab project introduced by Nanjing Economic and Technological Development Zone. The project started in 2016. After the first phase of the main plant was capped in 2018, the construction was stopped due to the break of the capital chain.

In June this year, the company was ruled to enter liquidation and bankruptcy proceedings by the court due to the issue of unpaid wages. According to the plan, the initial investment of the project is 800 million US dollars, which is about 5 billion yuan, but only 250 million yuan has been raised. Li Ruiwei, the main person in charge of the company, believes that social capital lacks confidence in this project.

Li Ruiwei explained that his identity in participating in the project was always an “operator” rather than an “investor”. At present, among the 368 million yuan of funds actually used by Dekema, it is composed of 250 million yuan of social capital introduced by the Nanjing local government and 118 million yuan of loans from the Nanjing Economic and Technological Development Zone in the later period.

Shen Yinlong, deputy director of the Management Committee of Jiangsu Nanjing Economic and Technological Development Zone, said: “The local government has not directly invested in this project. The 250 million yuan has been paid, and it comes from local investors.”

During the interview, the reporter learned that before Nanjing Dekema, Li Ruiwei also participated in the creation of another “Dekema” company in Huaian, Jiangsu. The company, Huai’an Dekema, was established in January 2016, but soon after, Li Ruiwei left due to team disagreements, and the project was renamed Dehuai Semiconductor, and another founder continued to promote it. .

Dehuai Semiconductor, which planned to invest 12 billion yuan in the first phase, also stagnated after the completion of the capital construction. In April this year, it was taken over by a working group dispatched by the local Huaiyin district government. After communication, the local government department sent a working group member to be interviewed.

In the workshop, the reporter saw that some equipment has been put in place on the site, but the overall configuration has not been completed, and the production line cannot be put into production normally. According to the staff, the factory is currently in a state of maintaining operations, with only 78 of the original nearly 1,000 employees on duty, and only a few senior executives are left behind.

Unlike Nanjing Dekema, the government has no direct investment. Of the 4.6 billion yuan actually invested in the Dehuai project, 3.5 billion belongs to the Huaiyin District government funds. According to the original agreement, in the total investment of the project, Dehuai’s sponsoring team and the Huaiyin District Government should invest 1:1 synchronously, but in fact, Dehuai’s team has been unable to raise funds for a long time.

At present, both Huaian and Nanjing have indicated that they are still negotiating with many parties at home and abroad, hoping to realize the project reorganization on the basis of the original construction.

Xu Yuquan, deputy director of the Dehuai Semiconductor Working Group Office: From a government perspective, we still want to revive this company. At present, the completion of the Dehuai semiconductor project has reached 90%, and it is only a step away. You can find some projects that are currently in the market with stable technology and market stability. It is about 3 billion yuan, and this project can be completed. start up.

Shen Yinlong, Deputy Director of the Management Committee of Jiangsu Nanjing Economic and Technological Development Zone: According to the current negotiation situation, the investment agreement for the new project will be officially signed in January next year, and the goal of restarting the Nanjing Dekema project will be achieved in the first quarter. We still have grasped.

3 The reasons for the stagnation of the project are complicated and the “small horse-drawn cart” in some places

The once promising local key projects have stalled for various reasons and turned into vacant factories. Although there is no tens of billions or hundreds of billions of losses as rumored by the outside world, the initial investment does face the risk of being wasted.

As the investigation deepened, the reporter found that behind the appearance of lack of money, there are deeper reasons for the stagnation of these projects.

In the interview, Li Ruiwei, the head of the Nanjing Dekema project, insisted that there was no problem with the direction they chose at the beginning, and the production capacity of 8-inch wafers for chips was in short supply, and the market is still growing rapidly today. However, the project investment is large and the return period is long, and it is easy to encounter problems in actual operation.

The reporter found that the two projects in Nanjing and Huaian have many things in common. In terms of product types, they all aim at the image sensor-based chip market; in terms of development paths, they all want to follow the “big and comprehensive” model called IDM in the industry, covering the entire industrial chain from chip design, wafer manufacturing to packaging and testing. However, the investment in this model is huge, and there are only a few successful cases such as Intel and Samsung in the world.

Xu Yuquan, Deputy Director of Dehuai Semiconductor Working Group Office: In fact, it is unrealistic for Dehuai to engage in the whole industry chain at present. At that time, the management’s awareness of the difficulty level of the project, or the overall planning, was insufficient.

In addition, these projects have spent hundreds of millions of funds to purchase technology licenses from overseas in the use of initial funds, and the Dehuai project also has a large amount of equipment investment. Whether the distribution of these expenditures is reasonable is also questioned.

Xu Yuquan, deputy director of the Dehuai Semiconductor Working Group Office: Too much capital is used to purchase equipment, and the cost of administrative operations is also high. At that time, a subsidiary of Dehuai in Japan, the annual R&D salary was close to 100 million. I think the allocation of funds is unreasonable.

When it comes to investment in these technologies and equipment, the local government also admits that there are certain deficiencies in professionalism. Xu Yuquan said: “From the perspective of taking over the working group now, the lack of talents in this area is mainly drawn from the agency. There are more people in administration, finance, and law, and they really do semiconductors, as far as I know. no.”

Across the street from the Dehuai project, there is another semiconductor project involving state-owned assets in Huaiyin District – Times Core.

Although they are also facing certain financial pressure, the person in charge of the company said that the government investment in their projects is smaller than that of Dehuai. At present, the first phase of the project has been basically completed, and the medium and low volume products are expected to be mass-produced next year, thus forming the company’s own hematopoietic function.

In recent years, Huaiyin District has regarded the semiconductor industry as a key strategic emerging industry, and vigorously introduced and cultivated a number of related enterprises. According to the survey, the actual investment of the district government has exceeded 4 billion yuan only for the two projects of Dehuai and Times Xincun. According to the local government website, the local fiscal revenue of Huaiyin District in 2019 was only 3.96831 billion yuan.

Xu Yuquan, Deputy Director of the Office of Dehuai Semiconductor Working Group: In the whole country, among similar semiconductor industries, the Dehuai project is driven by the finance or funds of a county and district. Obviously, there is a suspicion of “small horse cart”. Unable to carry.

4 The potential of the integrated circuit market is huge, and investment has been launched in various places

In fact, in the past two years, similar IC projects have stalled in Sichuan, Guizhou, Shaanxi and other places. However, based on the huge market developed by the chip industry, new projects are still being launched in various places. How to scientifically and prudently promote industrial development is a key issue currently facing.

At present, China has become the world’s largest chip demand market, but the self-sufficiency rate of domestic chips is not high. Data show that in 2019, the total import volume of China’s integrated circuits was about 445.13 billion pieces, and the total import value exceeded 300 billion US dollars, which has surpassed oil to become my country’s largest imported commodity.

The huge market opportunity has attracted all parts of the country to launch integrated circuit projects. According to incomplete statistics, in the first half of 2020, more than 140 related projects have been launched in 21 provinces, and the total disclosed investment has exceeded 307 billion yuan.

Industry experts believe that the integrated circuit industry has its own particularities, which not only require massive investment and long-term persistence, but also have high requirements for various basic conditions such as technology and talents, and not all places have the strength to make them. Wei Shaojun, vice chairman of the China Semiconductor Industry Association, said: “Its investment is often an astronomical figure, probably on the order of 10 billion yuan. For many second- and third-tier cities, it is completely unaffordable.”

Since 2014, with the promulgation of the national industrial policy and the successive launch of two large funds, the upsurge of industrial development has continued to heat up. According to Tianyancha data, there are currently about 244,000 related companies in China whose business scope includes “chips and integrated circuits”, and more than 60,000 related companies have been added this year, a year-on-year increase of 22.39%. Among them, there are also some companies that are not closely related to the integrated circuit industry, such as real estate, cement, and catering.

Wei Shaojun, Vice President of China Semiconductor Industry Association: It is not something that a simple grass-roots team can support. It needs a professional and very complete team. Such a team can range from a few hundred people to thousands of people.

Wei Shaojun believes that local governments should deepen their scientific understanding of the industry and carefully evaluate their own resources before launching projects. However, in reality, due to the urgency of local development of the industry, there are also situations in which local governments rush to launch projects to grab projects.

In July this year, the State Council issued “Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and Software Industry in the New Era”. Among them, it is mentioned that it is necessary to improve the industrial innovation ability and development quality.

In October, the National Development and Reform Commission stated that in response to the blind project implementation in some places, the stagnation of project construction and the waste of resources and other industry chaos, the next step will be to strengthen the planning and layout, improve the policy system, establish a prevention mechanism, compact the responsibilities of all parties, and establish an “early-planning system”. The long-term working mechanism of sorting out, early detection, early feedback, and early disposal”.

The Links:   LM64P844 NL8060BC31-17