Chip as the core of the information industry, its importance is self-evident, but for a long time, China's integrated circuit is heavily dependent on imports. Statistics from China Semiconductor Industry Association (CSIA) show that in 2017, China's IC product demand reached 1.40 trillion yuan, but the domestic self-supply rate was only 38.7%. At the same time, China's IC import volume exceeded 260 billion US dollars, which has replaced crude oil to become China's largest import commodity. In addition, the trade deficit of integrated circuits also hit a new high in 2017, reaching $193.2 billion, and the huge gap between supply and demand not only means a huge growth and domestic substitution space, but also will force the development of the entire semiconductor industry.

Although domestic chips have also achieved some good results in recent years, such as Huawei Hisilicon's latest Kirin 970 chip can compete with Apple's A11 bionic chip; Zte is also developing its own Xunloongson chip (the world's fourth 4G+ ultra-fast chip), and the Xunloongson 3 generation supporting Pre-5G will also be commercialized globally this year; The vast majority of consumer electronic products such as Bluetooth speakers, set-top boxes, refrigerators, washing machines and other core chips are also mostly domestic. However, in the mass application of communication, industry, medical, finance, government and military with higher stability and security requirements, the gap between domestic chips and the general level of international giants is still large. As a result, foreign chips are also widely used in the above key fields in our country, which is bound to cause major hidden dangers to information security. The earlier "Prism" incident is more incisive and vivid.

Based on the protection of national security and citizen privacy, the industry related to national information security has been promoted to the level of national strategy in recent years, and the state has also set up a related industry fund to promote the development of local chip companies. With the strong promotion of the national will and the joint efforts of local chip enterprises, it is expected that the chip localization of the core industry will pull 5 trillion yuan of capital investment in the next decade, and the financial industry is expected to become the pioneer and main force of the next wave of chip localization, and local security chip manufacturers, including national technology, will benefit greatly.

Leading security chip field

Public information shows that National technology was established in March 2000, is one of the high-tech enterprises specializing in the design of ultra-large scale communication integrated circuit and information security chip design, with information security, SOC, radio frequency as the core technology development direction, covering the whole process of IC design front-end to back-end technology, products related to security chip, security carrier and operation services. In the field of information security to create a complete solution from chip to service.

Through years of deep cultivation, national technology has mastered the core technology in the fields of safety and radio frequency. In the past, the company held a leading market position in the USBKEY security chip field with a market share of more than 70%. At present, the company has great potential in the direction of financial IC card chip, 2.4G mobile payment and trusted computing.

According to the regulations of the central bank, China will gradually stop issuing magnetic stripe bank cards from 2015 and replace them with more advanced financial IC cards. At present, various places have carried out the work of "magnetic stripe card core replacement" one after another. Industry estimates, next few years our country newly releases financial IC card quantity every year can amount to hundreds of millions of sheet. It is worth noting that the financial IC card chip is related to the security of national financial information, and it is almost inevitable that the future banking system chooses the state-owned chip to replace it. At the same time, the substitution of financial IC card chip localization is also gradually accelerating, the industry expects that the next 2 to 3 years is likely to become the key period of domestic financial IC card chip breakthrough.

Near field payment technology co-exists with financial IC card holder. It is worth mentioning that at the end of last year, National Technology independent innovation and research based on 2.45GHz RCC mobile payment technology has officially become the national standard of mobile payment. Compared with the mobile Internet payment represented by scanning code, near-field payment has many advantages: for example, the payment security advantage is significant; The payment scene is not affected by the network environment, and the full scene coverage is realized. It can realize fast and stable work in dense places such as subway and bus. Relevant data show that with the increasing popularity of mobile payment and the increasingly complex network security environment, the market demand for full offline high security mobile payment mode is expected to increase significantly, and the landing of national standards will also bring rapid growth to the relevant industrial chain.

From the perspective of product dimension, National technology is still the pioneer of China's trusted computing market. Trusted computing is to ensure the security and integrity of the whole computing system through encryption and authentication and other technical means from the design of the computer chip, hardware structure and operating system, which can fundamentally prevent the attack of computer virus and Trojan horse. As early as 2007, the trusted cryptography module security chip of National Technology has been initially developed successfully and started trial production. In 2008, the trusted computing chip began to be officially introduced to the market.

In 2013, the "prism" incident broke out, so that information security, network security market space rose to an unprecedented height, not only the future development of the market space is very large, and the short-term in the domestic will not form a strong competition, now, the trusted computing chip has become an important part of the national technology development strategy.

Technology drives the future

It is worth noting that the leading position of National technology in the field of security chips is inseparable from its long-term investment in research and development. According to the 2017 annual report released by National Technology, in the past three years, the company's research and development investment was 136 million yuan, 121 million yuan and 137 million yuan respectively, accounting for 24.18%, 17.16% and 19.78% of the operating revenue. At the same time, R&D personnel account for more than 65% of the company's employees in the past three years.

Not only that, national technology has also strengthened the investment in research and development of new technologies and new products. It is understood that the company developed based on advanced high-end technology, competitive Bluetooth chip, is expected to be mass production in 2018; The non-contact reader chip developed by the company has also been completed in small batch production. In addition, in the IoT market, low-power MCU and wireless communication chips will have more investment in the research and development and mass production of new technologies and new products, and will optimize the product structure with greater efforts, which will play a positive role in promoting the company's overall solution based on security chips and wireless communication into new industries and new markets.

While carrying out independent research and development, National Technology also actively expands the field of research and development through investment cooperation. Last year, Nationz Technology established a wholly owned subsidiary "Nationz Innovation Technologies Pte" in Singapore with $3.5 million of its own funds. Ltd." It aims to improve the R&D level of the company by establishing an excellent talent team overseas. In June this year, National Technology announced that it intends to invest 140 million yuan of cash in Huaxia Core (Beijing) General Processor Technology Co., Ltd. through its wholly-owned subsidiary Shenzhen Qianhai National Investment Management Co., LTD., which will account for 21.37% of the equity of Huaxia Core after the capital increase. In the industry, the hand of Huaxia core and national technology means that the two sides will work together to build a full range of domestic AI security systems.

It is worth mentioning that the national technology, which has the leading position in the security chip industry and continues to increase research and development, is still catching up, and is expected to continue to lead the development and growth of domestic security chip enterprises in 2018.