How hot is semiconductor investment?
Some investors said that the US dollar fund began to enter the market with tanks; some investors said that the projects on the water were basically completed;
Some investors said that they felt that the project was getting more and more expensive. They originally wanted to put the main target on the project with a valuation of 5 to 1 billion, but they looked around and found that the valuation was at least 1 to 2 billion;
Some investors said that they were also very confused. They thought that the investment in 2020 had already stopped. This year, XPU raised a lot of financing, and the bubbling and bubbling were so great that any project dared to be estimated at billions or even tens of billions. value;
Some investors even joked that this year compared with last year, the overall valuation level has increased more, and there are many good companies, but like marriage, I want to marry someone but the betrothal gift is too expensive to pay for it;
Even some entrepreneurs said that the popularity of chip investment not only exists in the primary market, but also in the secondary market. The effect of making money is very obvious. At the event organized by Goldman Sachs, they just wanted to make a simple demonstration, but they were asked to speak directly. Not to mention for an hour, all foreign investors are discussing and vying for each other…
Investment institutions shared a lot of real thoughts on the spot. For example, some people recalled that they had seen Weir shares at a valuation of 1.4 billion, but did not invest because of a small gap in performance, “missing the opportunity to earn 100 times.” But the advantage is that after the chip giant grows up, it still provides many opportunities for industry chain integration of subdivided tracks.
Under the current situation of how popular “The Speed and Passion of China’s “Chip” is, perhaps in the closed-door chip salon of the Cast 2? series of salons supported by Gimpo Investment, many guests can provide an insight into the current situation. direction of thinking.
Question 1: What are investors thinking?
Xiong Wei, a partner of Linxin Investment, mentioned that in the past seven or eight years, the number of investors who invested in semiconductors was as small as a table, and they could count with both hands, especially before the launch of the Science and Technology Innovation Board. It is gold, but the capital is colder. Therefore, in Xiong Wei’s view, there may be a slow replacement process, but after the launch of the Science and Technology Innovation Board, the entire investment environment has completely changed, and the popularity has risen.
Therefore, Wang Zhi, a partner of Weihao Chuangxin, clearly feels that projects are generally more expensive now, and projects that meet the previous valuation perception are becoming more and more difficult to find. Moreover, because the efficiency of information dissemination in the mobile Internet era has been greatly improved, each competition Once Dao’s leading companies emerge, they will soon become widely known, making investment decisions a bit more difficult. Either the company’s valuation has risen too fast, or the ceiling of its development prospects is too obvious, so it becomes more and more difficult to enter. mouth.
Wang Wenrong, a partner of Dachen Caizhi, said that if it is an early-stage project, it is hoped that there will be a return of more than ten times in the follow-up; if it is a mid-to-late project, then it is hoped that it can grow to a market value of more than 10 billion yuan in the future. This is the current screening project. In combination with the current market environment, Dachen has also established a professional team and fund, which can quickly make investment decisions on projects in this track.
Of course, Lu Jiaqing, a partner of Guoke Jiahe Fund, also pointed out that, on the one hand, the semiconductor market is very large, and many projects want to survive, but they are faced with the situation that investors will not pay if the valuation is too expensive; on the other hand, many investors Worried that the cycle of semiconductor investment may only be two years, and after two years, there may be chicken feathers, and there will be an immediate surplus; therefore, he recommends that you be more cautious when investing in projects. After all, although the current valuation is high, it may not be able to make money in two or three years, and it will always be repaid when it comes out.
On the contrary, Wang Fuyu, managing director of Heli Capital, said that Heli Capital is more willing to enter the game when others are not optimistic or understand it, because generally at this time, the company may still have some deficiencies. As a professional investor, Heli is willing to evaluate See if you have the ability to help fill these deficiencies, assist the development of the enterprise, tide over the difficulties with the enterprise, and enjoy the process of common progress together.
This is mainly because, in Wang Fuyu’s view, semiconductor investment has bubbles but not all bubbles. After all, semiconductors are not like tulips. They have actual demand and have a development cycle. Even if capital will become cold in the future, as long as the investment is right, There will always be market demand. Therefore, whether it is cold winter or midsummer, it affects 80% and 90% of the projects in the tail, and the selection logic of Heli Capital has become very simple: in the best track, the best investment is the first. first, second.
As for Zhang Gaonan, the managing partner of Huaying Capital, who just entered the market, it feels another way. He mentioned that in chip investment, Huaying Capital has just begun to make layout, but the underlying logic of investment is not the chip itself, but the ecological layout for data underlying computing power, 5G and new energy. intersection. At present, the only chip project that Huaying has invested in is Biren Technology. “The decision to make investment is also a huge determination, because the valuation is much higher than other consumer projects, and the project will face many challenges and uncertainties in the future. However, the super-large track and the super-large incremental market do require decisiveness. , which also made me have more awe and patience for chip investment.”
On top of this investment, Zhang Gaonan pays more attention to the underlying computing power of data, related software and hardware, and various changes at the bottom of the 5G industry chain. Of course, he also set three basic principles for this: only focus on the incremental market, segment the head, and must have strong technical barriers. Under this premise, the absolute valuation is not a bottleneck. The core is whether the project has higher room for growth in the next 5-10 years.
In Zhang Gaonan’s words, “As long as the price is within a certain reasonable range, there is enough potential growth and head effect, and there are enough barriers to competition, we still dare to take action.”
Feng Sicheng, general manager of Jinpu Xinchao Investment, said that now some industrial investment institutions are going deeper into the industrial chain, finding some highly skilled teams, and assisting them in integrating industrial resources, which can really help the current industry and solve the problem of the industry. Relatively short and scarce products on the chain can also be biddable at a better time. He judged that the large-scale shortage of chips this time is more of a structural shortage, and these require the industry chain and investment institutions to truly act together to generate synergies.
From the US dollar fund, Xu Rongfeng, executive director of Wuyuan Capital, put forward a more different perspective. Xu Rongfeng said that Wuyuan Capital hopes to invest in some innovative and revolutionary things to bring new opportunities for other business models.
Therefore, Xu Rongfeng expressed the hope that entrepreneurs will not be restricted by existing funds or the existing market, so that they cannot Display their talents. Wuyuan Capital is willing to accompany these entrepreneurs, regardless of whether they have a halo or not. , whatever their background, they all hope to give these people the opportunity to change the world.
“Is there any social value in our pursuit of doing this, and whether it can affect a group of people, a generation, or even everyone, this is what we want to do most.” Xu Rongfeng said.
Question 2: What are entrepreneurs doing?
In terms of value, Li Xin, secretary of the board of directors and operations director of Yaoxin Micro, said that it depends on others giving you a bowl of rice, how to cook it, how to eat it, how to cook it, or whether the bowl of rice is stable or not. Even though the social value may not be there, the economic value is there.
The idea of Yaoxinwei is to hope that the domestic alternative tickets can lead itself to form good product feedback and iterate quickly. In this way, the product can truly achieve both technological value and economic value, and seize the opportunity of the era brought by domestic substitution. After all, the opportunity of domestic substitution is very obvious in the following deglobalization process.
“We don’t pursue the red ocean very much. Our biggest advantage lies in the production-oriented design and serialization of all products. We hope to use the red ocean to feed the blue ocean. On the one hand, we benefit from the support given by all investors. On the other hand, we hope to form Self-circulation. No matter who rewards this bowl of rice, we all hope to eat this bowl of rice well.”
Ms. Wu Jin, the founder and CEO of Xunxin Micro, who completed the Pre A round in 2019, completed the A round in 2020, and is starting the B round, said that Xunxin has been continuously developing the key core chips of the country’s neck. The continuous development and improvement of the domestic integrated circuit industry chain also hopes to attract more capital and industry professionals. After all, when Xunxin can be widely publicized in major media, it shows that the independent controllability of the domestic integrated circuit industry chain has really arrived.
Zhang Hong, COO of Xizhi Technology, also felt the changes in the cold and warm in the process of starting his own business, “I felt the cold and heat of semiconductors in the process, because this industry will always be affected by uncertain external factors, and the current gust of wind has an impact on us. Helping, it also brings a lot of challenges.”
Zhang Hong said that no matter what, the company’s goals and positioning will not change, “We have revolutionary technology, and the target market is high-performance computing, such as AI computing and big data processing. Currently in the early stage of commercialization, The first products for commercial application can come out in the near future.”
As for the more cutting-edge brain-inspired chips, Qiao Ning, CEO of Shishi Technology, hopes that everyone will not only know that bicycles can go on their own, but also hope that the brain-inspired technology will be intelligent on the terminal, and the technology taken from the biological level will be used. On each end, achieve the intelligence of the end, and solve the problem of how to integrate the various sensors on the end, which is also the problem solved by the samples of the deliverer in the market.
In Qiao Ning’s view, at present, smart device terminals rely too much on large computing power, and the types of sensors on the terminals are relatively simple. In the future robot era, such as drones, unmanned vehicles, and bionic intelligent scenarios of robots, one computing terminal will serve hundreds of different types of sensors. Therefore, on the terminal device, a human-like brain is required to complete the real-time processing of multi-modal sensor information on the terminal. This is the problem that brain-like technology needs to solve.
Xu Xiaohua, Vice President of Finance of Hanbo Semiconductor, also observed two interesting phenomena. When he attended the semiconductor summit recently, he felt so nervous at the entrance of the men’s restroom for the first time that there was even a long queue. On the contrary, there was no one in front of the women’s restroom. This is a situation that does not occur at all other venues.
Another phenomenon is that on any occasion, I meet almost the same group of people. It is a very small circle to play around, so I am very happy that some other investors such as USD funds have joined now, and some are not specializing in these. Investors in the field also began to understand this track and began to raise their bets on this track.
As for the chip that Hanbo is making, it is to provide an overall solution of AI + video, which is the entry point of its choice.
“Many people ask how big your market is? The inference chips of the entire data center may be worth 60 billion yuan in 2025, and the people who pay for the 60 billion are often Internet giants. The acceptance of things is relatively high. At the same time, because the entry threshold of the data center AI chip is relatively high, it will not face a very scattered and highly competitive situation, so Hanbo has found such a scene to cut into and layout.” Xu Xiaohua said.
Ni Wenhai, chairman of Jiamei Xinxin, said that Jiamei’s track is smartphone chips and radio frequency chips, and the target is Zhuoshengwei. Now Kamei has crossed a mountain and has gone through the most difficult period, and the future is a period of rapid growth. “Our weakness is that the company has been in business for a long time, and it is not as smart as others, which is considered to be relatively cautious in the industry. However, our characteristics are that the technology is accumulated over a long period of time, the team is gradually tidy and professional, and there is a high degree of hunger for success. In March 2020, many investors were afraid to invest because of the epidemic, and even third-tier brands and investment institutions were very cautious. Liu Bo from Shenzhen Venture Capital always had a good eye. October sales are all up, and even some chips are in short supply.”
Therefore, starting from himself, Ni Wenhai said that in the next three years, the growth rate can be more than tripled every year, so now he is not worried about whether it can grow in the next two or three years, but after thinking about three years later, Jiamei Xinxin What kind of blue ocean market do you want to do?
“After so many years in this industry, you still have to be very careful in doing things. It is best to have very practical applications. For example, the usage of mobile phones is particularly large. Although the competition is fierce, once it is stabilized, it is a good vertical field. SoC, Digital chips are becoming more and more solidified, but RF front-end chips are a very exciting track. There are more and more modes, and the frequency and bandwidth are also getting higher and higher, so the number of chips adds up to a lot of shipments. At present, in addition to Zhuoshengwei’s excellent performance on the Science and Technology Innovation Board, the second and third places in the market have also become very opportunities.”
Regarding the valuation of a company, Wu Jin said that valuation is not the most important factor for entrepreneurs themselves. It is relatively easy to raise funds at present, and many founders think that a high valuation is a success. “However, if an enterprise wants to return to its nature, it must have a strong ability to make profits. The entry of capital is only to push the enterprise forward. It cannot be said that the enterprise is successful if it achieves a valuation of 10 billion, because it only represents the value of the enterprise and cannot truly reflect the enterprise. Therefore, the 10 billion yuan is false, and what truly reflects the success of an enterprise is the value of the products you make in the society or industry, and what contributions the enterprise can make to the industry or the country.”
At present, Wu Jin said that he will pay more attention to strategic investment in the start of the B round of financing, “Our company is in the stage of rapid growth. After the product has been iteratively polished in the past few years, it has now reached the stage of batch production. I hope that investors can come in and help us connect with each other. Industry and market resources, through the resources of investors, can be more efficiently matched to customers and quickly occupy the market, which is what I value the most.”
Hu Qing, vice president of Petabyte, also said very truthfully, “I don’t understand investment, our entire team is all from the industry, so every day we think about how to make products, how to improve reliability, and how to The chip yield has improved, and there is no shortcut at all. So how do investors make money? It’s very simple, we do things well. As an investor, I will invest in myself.”
Because of this, Li Xin said that ten years ago, entrepreneurs represented integrity and reliability. Now many entrepreneurs are doing it with investors’ money, but for more teams engaged in engineering and technology, it is still based on the principle of Act very cautiously. Of course, under the premise of doing a good job on your own, you still need the help of investment.
“We hope to be able to recycle by ourselves, so that when financing, we can have more and broader choices, not financing for financing, nor financing because there is no money in the account, but we want to see if there is a corresponding support, and whether there are other possibilities for in-depth cooperation.”
In a word, Ni Wenhai concluded, “Let’s not be so anxious, don’t feel too good about ourselves, but don’t be pessimistic, do it steadily, and operate in a solid way, because the trend of the times is very beneficial to us, and time is on our side. The entire investment and the entire flow of money will encourage hard technology, we just need to do it well, don’t be in a hurry, don’t be impetuous.”
Question 3: What kind of case should I vote for?
After the enterprise, in fact, more institutions should consider, under the current situation, how should they submit a case?
Liao Chengzhou, managing director of CMB International Capital, said, “We can only talk about how to balance, to be clear about what can be done and what cannot be done. This discipline must be adhered to, which is the so-called unity of knowledge and action. Many times, We all know that something is wrong and unreliable, but we still do it for various reasons, which means we don’t know; we have a strict Stop doing list. For example, the project of large-scale cloud chips, whether it is domestic or overseas, is absolutely Don’t touch.”
what is the reason? Liao Chengzhou mentioned that because he came out of the industry circle, his perspective and logic would be different when judging projects. “For example, why is the big cloud chip mentioned above resolutely not touching it? The logic is: Is the big cloud chip easy to do? The big chip itself has a very high level of technology and a huge investment, and at the same time, it is highly compatible with the tool chain ecological chain and application scenarios. Related, so in this field, the big companies in need have done it themselves, and the rest of the market, let’s not talk about how your things are doing, how do you use NV’s ecology to compete with NV?”
However, Wang Fuyu said that some of him agree with Liao Chengzhou’s views, but some do not agree. The reason is that the current overall environment has changed, and institutions are making money with poor perception, but the perception of each institution is not. will be exactly the same.
As for the current changes in the external environment, in the past, semiconductors were globalized semiconductors, customers were globalized, and suppliers were also globalized. When companies compete, they see a globalized competitive situation. Therefore, in the global environment, semiconductors are regarded as a sunset industry, and VCs in the United States do not even look at BP.
But now thanks to China’s national fortune, China has approached the economic size of the United States from the second largest economy. In this process, due to various reasons, the semiconductor market was forced to make cuts. This cutting may be a tangible barrier. Or invisible barriers, but in short, there will be a Chinese domestic recycling market. Chinese customers are more willing to find a local supplier, and Heli Capital is also willing to believe that Chinese companies will have opportunities to make breakthroughs.
Xiong Wei, on the basis of sorting out the project list he has invested in, said that he has not invested in any projects such as AI and GPU in recent years. For example, the application scenarios of game AI are relatively narrow and the competition is fierce. In addition, Tencent itself The more you do, the more conservative the valuation will be. Of course, in some other scenarios, the core technology can be replaced by domestic products, which has its own value, and therefore will have related investment layouts.
“Most projects have to see how much room there is to do it. For example, Montage Technology currently has a market value of 100 billion yuan, and its upside is very small, but it has become a leader in subdivided industries, but the upside becomes less important. After all, It has indeed become the technical champion in the segmented field. Of course, due to the influence of the Science and Technology Innovation Board, more companies will choose to go public or M&A in the future.”
Wang Zhi also mentioned the investment in Weir shares that year, “When the investment institution I was in looked at Weir, the valuation was about 1.4 billion. Unfortunately, the investment committee discussed it for a long time, and finally did not invest because of the small gap in performance. , missed a big opportunity to earn a hundred times more. Weil’s acquisition of OmniVision well reflects the combination of local market orientation and Silicon Valley technology capabilities, making OmniVision’s new products more in line with or even guide market demand. Image sensor is a very good track, there is still a lot of room for growth, and it brings a lot of investment opportunities from the perspective of industrial chain integration, we are relatively lucky.”
Lu Jiaqing also pointed out that in the investment market, in the final analysis, it depends on the balance of risk and return. Every VC has a different idea. After all, the valuation is expensive or it goes up. The influencing factors are very complicated, but in the end, VCs have to pay the bills, and they still have to rely on the backing.
“I recently invested in Huajin Semiconductor, and the advanced packaging project is a project in the backyard of the Chinese Academy of Sciences. I went to see Shanghai Microelectronics a while ago, and I went to beg for the investment share but did not squeeze in. But for example, we are now investing in A certain light source, which is the only light source of the lithography machine, as well as several parts companies with exclusive technology under the system of the Chinese Academy of Sciences, such a project can still be invested.”
Of course, more investors are relatively cautious when investing. Wang Fuyu took the investment in Shishi Technology as an example, “At that time, we selected six experts, interviewed for three hours on the circuit, and went to the University of Zurich in Europe to do a full week of due diligence. It took a lot of effort.”
But at the same time, “We hope to invest in some of the world’s top technologies and make some real changes. Of course, many companies are now working on future products, so there is no way to benchmark history, and its 0-1 The process of 1-2 and 2-3 is relatively simple, but it also bears the greatest risk in doing things. Therefore, in the process of investing, everyone has their own ruler, such as the ideal How many points are scored by the company, how many points are scored by the track, and how many points are scored by the product, will only make investment after a comprehensive analysis.” Wang Fuyu said.
In response to this, Lu Xiaobao, managing director of Zhongke Chuangxing, summed up the investment style or strategy of his own institution, Zhongke Chuangxing, and called it “bold and timid.” What does that mean? That is, in the face of early-stage projects, especially in the face of projects that everyone does not realize but have the opportunity to change society and change the industry in the future, but the trend has not yet arrived, investment will become more aggressive.
But on the other hand, Zhongke Chuangxing is more resistant to the outlet. “If this thing hasn’t gotten hot yet, the person who does this thing at this time must have been in this field for a long time, and his accumulation, resources, and cognition are probably the most reliable in this industry. At this time, I will see if there are three companies that have a chance to find it. the strongest.”
Lu Xiaobao said that when the trend comes, there may be 300 companies nationwide and around the world, and even the top 10% cannot be ranked. Zhongke Chuangxing will be more cautious. At the same time, assuming that many projects have gone to the late stage, when revenue and profits have increased, they are less likely to grab such projects.
Wang Zhi also mentioned some subtle changes in the investment of investment institutions, such as the current perception of many related industries, especially in RMB funds, not only GPs have a threshold for understanding the semiconductor industry, but also LPs. There is a conflict between the short duration and the long project growth cycle of the semiconductor industry. In addition, many companies in the industrial chain also prefer to choose investors with industrial backgrounds, because the latter can bring them more market or other cooperation.
Zhu Xiangqian, general manager of the new generation of information technology of Huakong Fund, also pointed out that in the next 5-10 years or even a longer period, the trend of independent control in the semiconductor field is established, and the popularity of the domestic primary and secondary market also shows that everyone is generally optimistic . For domestic semiconductor companies, it is necessary to seize the opportunity, first gain a foothold in the Chinese market opportunity window, and finally grow up in the global market competition, to seize industrial opportunities and make good use of capital dividends. This is also a market behavior and is understandable. . However, it is also recommended that semiconductor companies be more aware of the high threshold and long cycle of industrial development, and should not be impetuous.
For investment institutions, most institutions use LP’s money to serve enterprises. It depends on which stage of meals you eat. Under the current market conditions, it is nothing more than earning more or less. This is not the most important thing. The most important thing is to look at the subdivision industry, choose the right company, choose the right team, choose the right time to cut in, and allocate the limited funds. It is fundamental that a company can grow and become bigger. It depends on when you are willing to accompany the company to grow and how long you are willing to accompany the company. Besides funds, what else can you help the company? Things, professional institutions will eventually approach the matching of risk and return.
And all of the fundamental issues involved, Wu Yu, executive general manager of the equity investment department of Yuexiu Industrial Fund, pointed out that the basis of all discussions is, how long does it take investors to invest in semiconductors or integrated circuit chips in China? If the cycle is very short, or one cycle is over, those who catch up will make money, and those who catch up will lose money directly. There is no limit to the investment cycle, and there is no point in discussing any issues.
In Wu Yu’s view, from an industrial point of view, semiconductors in China have at least a ten-year cycle to do. Under this premise, the investment standards are similar. To sum up, there are three points: one is to respond to market demand, and the other is to improve products. Supply, the third is to take the original technology. How to actually implement it behind the scenes, the strategies vary from one company to another.
So in the final analysis, Lu Xiaobao said, “The price of the project must fluctuate up and down on the core value. Then, all projects must ask themselves: How big is the market you are facing and how fast is the growth rate? Are there any pain points in the market you are facing? How rare are you?”
Liang Zhao, vice president of Jinpu Investment, who has just switched from a leading semiconductor foundry company, said that when he arrived in the investment circle, he found that money was pouring into the industry, but sometimes when investors were fired, the company suddenly became very bad. Fire, the valuation will go up. Therefore, when investing in chips, although you can’t see or touch it, and your heart is a little empty, you still need to professionally judge the technical hard power of the company.
In addition, “Science and Technology Innovation Board is up, and the valuation is very high. It seems to be a feast for capital or semiconductors, but in turn, it needs to be viewed with a little rationality. It is impossible for the Science and Technology Innovation Board to list all semiconductor companies. Within the range, if the industry is built, the investment can also be done well. It is best to balance the two without being aggressive. When many companies talk now, the valuation is open, not as high as it was a few months ago, indicating that The industry has started to become rational.”
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