In 2018, Xinlian Integration, which originated from SMIC's characteristic process division, started with wafer foundry and extended upwards to design services and downwards to module packaging. After more than 6 years of development, Xinlian Integrated is currently the largest manufacturer of automotive grade IGBT chips, SiC MOS, and MEMS sensor chips in China. It has OEM silicon carbide chips for several leading new energy vehicle companies and rapidly developed into a leading automotive chip company in China, becoming a "rising star" in the automotive chip field. From 6 inches to 8 inches Compared with traditional silicon-based devices, silicon carbide, as a third-generation semiconductor material, has a low resistance characteristic that is superior to silicon-based semiconductors. It can achieve "high withstand voltage", "low on resistance" and "high speed" performance simultaneously, thereby achieving higher system efficiency, lower loss and space miniaturization. Therefore, it has been widely used in power conversion, "said Zhao Qi, General Manager of Xinlian Integration, in an interview with Securities Times reporters. Silicon carbide is an emerging high-performance semiconductor material, and automobiles are one of the main application markets for silicon carbide. In recent years, the rapid growth of the domestic new energy vehicle market has driven the continuous increase in demand for silicon carbide devices and modules. At present, silicon carbide is mainly used in the key power systems inside new energy vehicles, including main drive inverters, on-board chargers (OBC), and DC-DC converters. At the same time, the photovoltaic field is also beginning to try using silicon carbide in large photovoltaic power plants. However, high costs and limited production capacity have become key obstacles to the large-scale application of silicon carbide devices. In this context, expanding from 6 inches to 8 inches is the best path to solve the problem of high cost of silicon carbide. The larger the size of silicon carbide wafers, the lower the unit chip cost, so upgrading from 6 inches to 8 inches has become the trend of industrial development. Looking at the world, major domestic and foreign manufacturers are accelerating the clearance of 8-inch silicon carbide wafers, and semiconductor giants such as SciClone, STMicroelectronics, and Infineon are building 8-inch production lines. For example, on August 8th, Infineon announced the official launch of the first phase of its 8-inch silicon carbide power semiconductor wafer fab project located in Kulin, Malaysia. Chinese enterprises have already joined the upgrading and transformation of the silicon carbide industry, especially in the field of substrate preparation, and have obvious competitiveness. What are the technical difficulties that need to be overcome from 6-inch silicon carbide "device manufacturing" to 8-inch silicon carbide? Zhao Qi said that at present, the main problem to be solved is the warping of silicon carbide substrates in production. The thickness of an 8-inch silicon-based substrate is 0.725 millimeters. Although silicon carbide crystals are very hard, in order to make the substrate sheet cheaper, it needs to be thinner than silicon, such as 0.35 millimeters. This thickness still has a certain rigidity at 6 inches, but it will warp at 8 inches. After warping, the substrate sheet will no longer be on the same plane and cannot be vacuum absorbed, "Zhao Qi said. The industrial chain of silicon carbide mainly includes substrate, epitaxy, device design, wafer manufacturing, module packaging and other links, among which about 70% of the value of this industrial chain is concentrated in the substrate and epitaxy links. Zhao Qi told reporters that at present, 6-inch silicon carbide substrates and epitaxy can be fully independently supplied in China, and 8-inch ones have also entered the offline verification stage. Xinlian Integration has been preparing for the expansion of silicon carbide to 8 inches for a long time. On the one hand, we have accumulated technology by making 6 inches, and on the other hand, through cooperation with 6 inch suppliers, we have also started to let them make 8 inches. When we confirmed that the substrate and epitaxial 8 inches could be made almost, we started the 8-inch device manufacturing line, "Zhao Qi introduced. Looking back at the path of silicon carbide construction in Xinlian Integration, it began investing in silicon carbide related production lines at the end of 2021 and gradually formed production capacity in 2022. In 2023, Xinlian Integrated will begin construction of the first 8-inch silicon carbide device production line in China, aiming to drive the entire chain of 8-inch substrate, epitaxial, and device production in China and catch up with the layout of mainstream foreign manufacturers. In April of this year, the 8-inch silicon carbide engineering batch products of Xinlian Integrated were successfully launched, marking the company as the first domestic wafer fab to produce 8-inch silicon carbide. Regarding the future development of the silicon carbide business, Zhao Qi stated that the goal of Xinlian Integration is to achieve silicon carbide revenue exceeding 1 billion yuan by 2024, and looks forward to achieving higher global market share in the next two to three years. Technological innovation leads butterfly transformation What kind of enterprise is the first to produce 8-inch silicon carbide integrated chips in China? Xinlian Integration was born in 2018 from the characteristic process division of SMIC, and its core technical personnel have been deeply involved in the semiconductor industry for decades. The company will be listed on the Science and Technology Innovation Board in 2023 and is committed to providing core chips and modules for the new energy and intelligent industries. Since its establishment 6 years ago, Xinlian Integrated has grown into the largest IGBT, SiC MOS, MEMS sensor chip manufacturer in China, with products covering over 70% of automotive chip types. The key "password" behind the rapid growth of Xinlian Integration in 6 years is twofold: on the one hand, it has caught up with the rapid development pace of new energy vehicles and other industries, and on the other hand, it has continued to maintain high-intensity research and development investment. Since its establishment in 2018, Xinlian Integration has invested approximately 30% of its annual sales revenue into research and development. In the first half of 2024, the company's total R&D investment was 869 million yuan, an increase of 33.75% compared to the same period last year. At the same time, Xinlian Integration continues to maintain growth in terms of the number of R&D personnel and the cumulative number of authorized patents. Zhao Qi stated that under continuous high-intensity R&D investment, Xinlian Integrated Technology started with only MEMS (Micro Electro Mechanical Systems Integrated Circuit) and power devices, developed power module business in 2019, developed high-voltage analog IC and BCD platform in 2020, entered SiC MOS (Silicon Carbide) in 2021, started laser radar in 2022, and expanded to MCU (Single Chip Microcomputer) in 2023. Taking one step, looking at three steps, and entering new technological fields every year is the goal that Xinlian Integration has adhered to since its establishment. Xinlian Integration enters at least one new field or direction that is still weak in China every year to carry out research and development, and through rapid iteration, reaches the leading level domestically within two to three years, "Zhao Qi told reporters. Based on the emphasis on research and development investment, Xinlian Integration has not only seized the market increment brought by fields such as in car LiDAR and high-end microphones, but also further consolidated its position in the three core product areas of silicon carbide, analog IC, and in car power. However, the process from investing in research and development to successfully producing results is not an overnight process, and Xinlian Integration has also faced many challenges in research and development. For example, the problem of high cost of silicon carbide devices is not easy to solve. Based on current prices, the cost of 8-inch silicon carbide wafers is still higher than that of 6-inch wafers. In order to solve the problem of high cost of silicon carbide, we have reduced costs by improving the overall yield of the industry chain, increasing wafer size, and shrinking devices. In addition, the company has also built the first 8-inch SiC MOSFET production line in China in order to gain a greater competitive advantage in the emerging power electronics market, "said Zhao Qi. In June of this year, Xinlian Integrated announced its intention to acquire the remaining 72.33% equity of its controlling subsidiary Xinlian Yuezhou Integrated Circuit Manufacturing (Shaoxing) Co., Ltd. (hereinafter referred to as "Xinlian Yuezhou") through issuing shares and paying cash. After the transaction is completed, Xinlian Integration will hold 100% control of Xinlian Yuezhou. The Xinlian Integrated Plan to acquire Xinlian Yuezhou has a silicon-based production capacity of 70000 pieces/month and a 6-inch SiC (silicon carbide) MOSFET production capacity of 5000 pieces/month. At the same time, it has made forward-looking layouts on high-tech platforms such as high-voltage analog ICs. Its 6-inch SiC MOSFET shipment volume ranks first in China, and it also holds the first 8-inch production line in China. Data shows that in 2023, the shipment volume of 6-inch SiC MOSFETs from Xinlian Yuezhou has reached the top in China. After the acquisition is completed, Xinlian Yuezhou is expected to become the main carrier for Xinlian's future expansion of 8-inch silicon carbide production lines. At present, Xinlian Integration has formed the first growth curve of 8-inch silicon-based chip and module production lines mainly composed of IGBT, MOSFET, and MEMS; The second growth curve represented by SiC MOSFET chip and module production lines; The third growth curve is the analog IC mainly based on high-voltage and high-power BCD technology, and the three growth curves will cover different product fields and application directions. In the future, Xinlian Integration will continue to expand its new product line and plans to launch a high reliability, high-performance dedicated MCU platform in the second half of this year. Intensify the layout in the AI field Focusing on the latest market changes, generative artificial intelligence (AI) is accelerating its penetration into global industries. Xinlian Integration is actively expanding into emerging markets such as AI and data centers. In the past three years, Xinlian Integration has invested over 2 billion yuan in AI, providing long-term growth momentum for its next development. In the first half of 2024, Xinlian Integrated's 0.18um BCD process products for multi-phase power supply in AI servers were successfully mass-produced, especially Xinlian Integrated's 55nm high-efficiency power management chip platform technology for data center servers, which has been designated as a major project by customers. In terms of performance, AI has brought new growth to the cloud server related business of Xinlian Integration, and the explosion of AI demand has also driven Xinlian Integration's performance growth in the first half of 2024. In the first half of 2024, Xinlian Integration's operating revenue was 2.88 billion yuan, a year-on-year increase of 14.27%. Driven by AI demand, its new energy vehicle business segment contributed 48% to revenue. Zhao Qi pointed out that with the continuous growth of AI computing power demand, the analog IC business in the field of integrated circuits has also maintained stable growth as a result. The power management chip is an analog IC designed based on the widely used analog process technology BCD (Single Chip Integrated Process). Xinlian Integration is one of the few wafer fabs that has a full platform for high-voltage and low-voltage BCD, while also focusing on unique processes and devices. It has made substantial progress in its business. In the first half of 2024, Xinlian Integrated released four new vehicle grade platforms in the field of analog IC chips, among which the digital analog hybrid embedded control chip manufacturing platform filled the gap in domestic high-voltage high-power digital analog mixed signal integrated IC; The technology corresponding to the high edge intelligent switch chip manufacturing platform and the high-voltage BCD 120V platform is a scarce technology in this field in China; The technology corresponding to the high-voltage SOI BCD platform is at the leading level in China. At the same time, the company has been designated by multiple domestic car companies and Tier 1 projects. In the first half of the year, multiple integrated BCD process platforms were launched, filling the domestic gap. It is expected that analog ICs will become the fastest-growing part of the company from 2024 to 2026, "Zhao Qi told reporters. According to Zhao Qi, Xinlian Integration will continue to expand its business areas, comprehensively layout the high growth AI high-speed server field, provide complete power management chip and module outsourcing services for multiple AI systems such as AI server power supply and AI cluster communication, and provide technical support and large-scale high-quality delivery guarantee for product companies to create domestic AI server power supply outsourcing solutions. Zhao Qi also emphasized, "In the future, Xinlian Integration will continue to increase research and development investment, promote technological innovation, achieve high-level technological self-reliance and self-improvement, make greater contributions to the independent and controllable development of China's semiconductor industry, and strive to occupy a more important position in the global semiconductor industry, becoming an important force leading the new energy and intelligent revolution