How to understand the IC test

The continuous deepening of the vertical division of labor is the general trend of the semiconductor industry. Semiconductor manufacturers have entered the sub-fields of materials, equipment, chip manufacturing and other fields of excellence to jointly promote the progress of the industry chain. Therefore, only chip manufacturing has been subdivided into three links: design, manufacturing, and packaging and testing.

“Packaging and testing” means “encapsulation” and “testing”, and is the last link in chip production. The so-called packaging is to encapsulate the chip with a plastic insulating medium to ensure the stable and reliable operation of the chip; the so-called test is to detect the performance of the chip after packaging.

Packaging and testing is one of the best links in the development of China’s semiconductor industry. At present, three of the world’s top ten packaging and testing companies are from mainland China.

“Independent third-party integrated circuit testing” is a market formed after the industry is further subdivided. Independent third-party testing mainly focuses on the requirements of chip functions, performance and reliability, and makes value judgments through the combination of software and hardware, and complements the packaging manufacturers.

Although it is an emerging track, a number of emerging domestic manufacturers have come to the fore, and Liyang chips are among them. Driven by the two major businesses of chip product testing and wafer testing, Liyang Chip has grown into a track leader with an annual revenue of 232 million yuan.

Under the trend of market segmentation, how much market space does independent third-party testing have? How will Liyang chip hit the sci-tech innovation board to seize the growth opportunities in the subdivisions?

Independent test of industry segmentation achievement
Once upon a time, IDM (Integrated Device Manufacture) was the main mode of the chip industry. Head manufacturers integrate chip design, manufacturing, and packaging and testing into one, relying on economies of scale to win. An industrial giant like Toshiba, whose business has included upstream wafers, midstream chips, and downstream terminal equipment, runs through the entire industry chain.

However, the IDM model of “large package and large package” has high management costs and huge investment. The upstream business is slack in market competition because it does not worry about customers. In the long run, its product competitiveness will be inferior to a company with a single business. The division of labor in the semiconductor industry is a general trend, and new models such as “Foundry”, “Fabless” and “Chipless” have emerged.

Foundry means that the manufacturer is only responsible for the part of chip manufacturing, commonly known as “foundry.” Initially, because of the high manufacturing costs in developed countries such as Europe and the United States, the manufacturing process began to shift to Asia. Although it is called “OEM”, its technical content is not low. TSMC is the world’s largest Foundry manufacturer, with the world’s most advanced process chip manufacturing capabilities, and it is irreplaceable in the global chip industry chain;

Fabless means that the manufacturer is only responsible for chip design and does not involve production. Huawei HiSilicon is the representative; ARM has created the Chipless model: it neither designs chips nor produces chips, but designs efficient IP cores. Other chip design manufacturers Design your own chip products based on its core. Whether it is Apple’s A-series chips, Qualcomm Snapdragon or Huawei Kirin, they all use the ARM architecture.

In addition to chip design and manufacturing, the packaging and testing industry is also becoming “independent” and growing. China’s packaging and testing industry has benefited from the huge chip market and gradually narrowed the technology gap. Changjiang Electronics Technology (600584.SH), Huatian Technology (002185.SZ), and Tongfu Microelectronics (002156.SZ) have emerged. , Jingfang Technology (603005.SH) and other listed companies, occupy three positions among the world’s top ten packaging and testing vendors.

2011-2019 China IC packaging and testing sales revenue and growth

2011-2019 China IC packaging and testing sales revenue and growth

The market for “testing” itself cannot be underestimated. In Taiwan, where the semiconductor industry is developed, outsourcing testing giants like KYEC have emerged in the professional testing field. According to the statistics of Taiwan Industrial Research Institute (IEK), the output value of IC test in Taiwan in 2017 was about 4.7 billion U.S. dollars, accounting for up to 70% of the global market.

With the development of China’s integrated circuit industry, the demand for related professional testing is also increasing. The “integrated packaging and testing” model is mostly “self-inspection”, and “independent third-party inspection” forms a good supplement. According to the introduction of Liyang’s chip prospectus, independent third-party testing can test the function, performance and quality of chip products according to the individual needs of customers, and is “the goalkeeper before chip products are introduced to terminal applications.”

The demand for chip testing is not static. The test procedures and conditions of different chips are not only different, but also involve a large amount of data analysis, so the relevant procedures must be designed and developed specifically. Independent third-party integrated circuit test manufacturers are good at developing test solutions, and can measure the performance parameters and functions of the chip based on the working principle of the chip. As the first domestic manufacturer to enter this field, Liyang Chip has been working for more than ten years and has accumulated a lot of research and development experience.

As the demand for chips becomes more diversified, the design and manufacturing of chips becomes more personalized and diversified. Professional testing vendors can quickly respond to customer needs, which is more suitable for the subdivided industry structure.

Independent third-party testing is undoubtedly the new blue ocean after the semiconductor industry is subdivided.