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On July 25, the second semiconductor third-party analysis and testing ecosystem strategy conference "Building consensus, discussing the future" hosted by Sembcorp Nano (Suzhou) Co., Ltd. (hereinafter referred to as Sembcorp Nano) was successfully held in Suzhou Industrial Park.

Following the successful convening of the first "Semiconductor Future Road: Third-Party Analysis and Testing Ecosystem Strategic Conference", the conference has become the focus of the industry with its unique professionalism and influence. This conference was attended by more than 500 important guests, including leaders of leading companies in the upstream and downstream of the semiconductor industry chain, covering more than 400 domestic and foreign companies and research institutes in the fields of chip design, wafer manufacturing, equipment materials, packaging and testing, consumer terminals, and analysis and testing laboratories. 13 industry leaders brought cutting-edge technology sharing and innovative development reports, igniting the passion of the participants. The sharing content not only covers the innovative development and collaborative cooperation of the semiconductor industry ecosystem, but also includes topics such as the construction of an evaluation system for third-party analysis and testing service agencies and the application and development of laboratory intelligent systems.

At the conference, Li Xiaomin, Chairman of Sembcorp Nano, shared a keynote report titled "Semiconductor Industry Cycles and Track Cycles within Cycles". He pointed out: "As a "chip general hospital" that is deeply involved in the R&D and production activities of more than 2,000 semiconductor companies around the world, Sembcorp Nano has a unique perspective overlooking the entire semiconductor industry chain and has witnessed the rise and fall of each small track in the semiconductor industry cycle. There is no absolute high-tech track, let alone an eternal high-tech company. In the context of industry competition, innovation is the only way out of involution. Only by maintaining continuous investment in R&D and innovation, and exerting efforts in technology, talent, market and other aspects, can we stand out in the involutionary industry and maintain long-term competitiveness."

During the conference, Jiwei.com conducted an exclusive interview with Li Xiaomin, Chairman of Sembcorp Nano.

The power of industry division of labor

Hundreds of years ago, Adam Smith proposed in The Wealth of Nations thatDivision of labor is an important force in promoting economic growth and national prosperity. Specialized division of labor has always been the mainstream development model of the semiconductor industry. Decades ago, Fabless made TSMC a third-party foundry giant, as well as Qualcomm, Nvidia, and pure design companies such as AMD, which rose rapidly after giving up its own fabs and focusing on design in 2009. The power of industry differentiation is enormous. Whether in terms of cost control or technology iteration speed, it is ahead of the IDM model that integrates the design, manufacturing, and packaging industries, which marks a more advanced production method.

Seeing the power of this specialized division of labor, Li Xiaomin creatively proposed the concept of "Labless", separating the "necessary non-core" R&D links in the industrial chain from the industry, having them completed by third-party laboratories and turning them into a new independent industry track.

In 2020, Li Xiaomin wrote an article entitled "The Past and Future of Labless", which is still deeply fermenting in the industry. Li Xiaomin said that in fact, the business prototype of "Labless" sprouted in 2010. As early as around 2010, Sembcorp Nano Singapore quickly emerged as the largest third-party laboratory in Southeast Asia. When a company's market share exceeds 50%, there is no longer room for growth that doubles or more every year as in the early days. Sembcorp Nano's growth seems to have encountered an industry ceiling. At that time, Li Xiaomin thought that if customers were persuaded to abandon their own laboratories and rely entirely on third parties like Sembcorp, then the industry ceiling would no longer exist, and it would create a purely incremental market, and the entire industry's upstream, midstream and downstream would be beneficiaries. So he found some well-known companies in the industry to negotiate, but at the time these companies did not agree with Li Xiaomin's business philosophy.

It was not until the friction between China and the United States continued to intensify, forcing Chinese companies to do research and development from the bottom up, that the industry realized the supporting role of a professional third-party laboratory in research and development and production, and the business concept of Labless began to be slowly accepted and recognized by the industry. At the same time, more and more third-party testing laboratories have emerged. In recent years, with the continuous popularization of the Labless business concept, major equipment manufacturers have found that third-party laboratories have become the main purchaser of instruments and equipment, and the industry status of third-party laboratories has gradually improved.

The labless model and the fabless model are essentially outsourcing of factory needs. Both are the product of industrial specialization and division of labor, and are also the inevitable result of the industry's pursuit of higher efficiency.Li Xiaomin believes that the industry differentiation of Labless is the divestiture of necessary non-core auxiliary R&D activities in the industry. He has always believed that as the differentiation of Labless industry continues to deepen, laboratories similar to the scale of wafer fabs will definitely appear in the market, which will be the future development trend of the industry.

The birth of the “Chip Hospital”

Looking back at Li Xiaomin's entrepreneurial journey, it also accompanied the ups and downs of the semiconductor industry. Li Xiaomin graduated from Peking University in 1998 and then went to the National University of Singapore to pursue a master's degree in electronic engineering. During the more than two years of studying under the famous semiconductor physicist Professor Li Mingfu, Li Xiaomin not only greatly improved his independent scientific research capabilities, but also had a profound impact on the formation of his later values.

According to Li Xiaomin, he successfully received employment notices from several large semiconductor companies during the graduation season of the National University of Singapore at the end of 2000. However, when he actually left school, the Internet bubble burst, causing the semiconductor industry to experience the largest recession in its 40-year history, and all the job opportunities he had previously negotiated fell through. Later, under the recommendation of Professor Li Mingfu, Li Xiaomin joined the Singapore Microelectronics Research Institute to learn chip failure analysis technology, and on behalf of the institute, provided chip failure analysis technology services to many local semiconductor companies in Singapore.

During the years that Li Xiaomin worked at the Singapore Institute of Microelectronics, the international situation was not optimistic. A series of catastrophic events caused the global economy to be extremely depressed, and Singapore's economy was also greatly impacted. Li Xiaomin's work at the institute was also extremely stressful. After three years of hard work, he only received a salary increase of less than 10%. So Li Xiaomin came up with the idea of ​​starting a business.

The professional skills of semiconductor chip failure analysis and material characterization technology accumulated over the years are the foundation of Li Xiaomin's entrepreneurship, and are also the rigid demand for production and research and development activities of many semiconductor companies. At that time, there was no commercially operated high-end analytical laboratory in the Singapore market. If the industry did not want to spend huge sums of money to build its own laboratory, it could only entrust scientific research institutes with government backgrounds to meet such needs. However, scientific research institutions with government backgrounds cannot fully meet the various needs of enterprises in terms of timeliness or depth of understanding of industrial products.

At the end of 2004, Li Xiaomin established Sembcorp Nanoscience Singapore with his only 20,000 Singapore dollars in savings, and the prototype of the "Chip Hospital" was born. By 2007, the revenue had increased several times, and Li Xiaomin had the first focused ion beam equipment. Sembcorp Nanoscience also achieved a leap from "barefoot doctor" to "small clinic".

Although the global financial crisis in 2008 severely impacted many technology companies around him, and some even went bankrupt, Li Xiaomin achieved a substantial increase in revenue in 2008 with his important supporting technology for the iPhone 4 LED chip introduction solution, which opened up a period of rapid development for Sembcorp Nano in Singapore. With its own accumulated profits and subsequent loans from banking institutions, Sembcorp Nano expanded rapidly in the following years and by 2011, it had become the most powerful semiconductor analysis laboratory in Southeast Asia.

New opportunities in China

In 2012, against the backdrop of China-Singapore cooperation, Li Xiaomin established Sembcorp Nano (Suzhou) Co., Ltd., a purely domestically-owned Chinese company, in Suzhou Industrial Park. This was his second start-up from scratch. Since receiving its first round of financing in October 2015, Sembcorp Nano has expanded several times in China and Singapore, and its business has also developed rapidly. In 2017, Sembcorp Nano (Suzhou) acquired Sembcorp Nano Singapore. From 2020 to 2022, Sembcorp Nano's revenue compound growth rate was as high as 54%. Even in 2023, when the global semiconductor cyclical recession occurred, Sembcorp Nano achieved a revenue growth of 37%.

To date, Sembcorp Nano has served more than 2,000 semiconductor companies around the world, covering the entire industry chain from semiconductor materials, equipment, chip design, wafer manufacturing, packaging and testing to end products, providing customers with one-stop analysis and testing and auxiliary R&D services throughout the entire life cycle, from product development, large-scale mass production, and product after-sales. Sembcorp Nano has grown into one of the most influential third-party semiconductor analysis service providers in the world.

The media once described Sembcorp Nano as "originated in Singapore, developed in China, and looking at the world."

Li Xiaomin said, "Singapore is a highly internationalized developed country, and its science and technology field has always been in a leading position internationally. It has gathered outstanding talents from all over the world." However, the market capacity of Singapore is limited. He suggested that Singaporean start-ups must look to a larger market after they have accumulated certain technologies and reached a certain scale. Sembcorp Nano is one of the very few companies that started businesses in both Singapore and China and succeeded by chance. He has a lot of personal experience and experience in starting businesses in both places, so after the establishment of the ASTAR Suzhou Enterprise Cooperation Center of the Singapore Institute of Science and Technology, he was also very honored to serve as an entrepreneurial mentor for companies settled in Singapore. Last year, they also joined hands with the Singapore University of Technology and Design to introduce Singapore's excellent educational resources to China, and cultivate practical talents in the field of semiconductor chip failure analysis for China and Singapore.

Neutrality is the key to success

As a third-party laboratory, Li Xiaomin regards neutrality as the winning magic weapon of Shengke Nano.

Li Xiaomin said that Sembcorp Nano is only a third-party laboratory for analysis and testing in the semiconductor industry chain. This role is neither design, nor manufacturing or packaging. The Labless business concept we put forward clearly states that Sembcorp Nano is only a "service provider for auxiliary research and development" and we will never directly participate in the production of any physical products. He said that we must respect the cyclical nature of industry development and insist on being a neutral third-party laboratory.

Li Xiaomin believes that the most difficult thing for Labless is to gain the trust of customers, because we are deeply involved in the R&D and production of customers. In many cases, the chip products we touch are the future products of customers. How to make customers deeply trust us is the key core element.Sembcorp Nano's business bottom line is clear and explicit, and it has always adhered to the principle of "not touching equipment and not touching products".

Li Xiaomin emphasized that we should not be tempted by any short-term interests and give up our bottom line, destroying the neutral industry position formed over the past decade. We would rather choose to give all equipment-related IPs to our suppliers and all product-related IPs to our customers. We only retain IPs related to analytical technology, and continue to build our moat while protecting our upstream and downstream ecosystems. For a long time, Li Xiaomin has indeed been implementing this concept, maintaining a healthy customer structure internally and maintaining a good industry ecology externally. Since its inception, Sembcorp Nano's strong profitability and cash flow control capabilities have been one of Sembcorp's core competitive advantages.

Li Xiaomin said that as long as the country pays attention to the development of the semiconductor industry, it will be good for us. Accurate industrial policies are always "teaching people how to fish". Creating an ecological environment suitable for industrial development is more important than directly subsidizing enterprises. It is precisely because Sembcorp Nano has implemented an international and neutral business philosophy that it has won the recognition of many suppliers and high-end customers, achieved the deep mutual trust between Sembcorp and 2,000 customers today, and achieved today's Sembcorp, and will also achieve the future Labless business model.

On the road of Labless development, Li Xiaomin also hopes that third-party laboratories should uphold rational and correct concepts to jointly promote the industry to become bigger and stronger. Some third-party laboratories have problems such as uneven capabilities, weak awareness of information security management, and easy cross-border operations. These factors will also reduce customer trust, thereby affecting customers' willingness to outsource. In order to avoid the breeding of industry chaos,Li Xiaomin actively called on the industry to formulate an evaluation system for third-party analysis and testing service agencies as soon as possible.

Talent cultivation wins the future

In today's highly competitive business environment, talent has become the core driving force for the development of a company. Building a team of talents with professional skills, efficient execution and innovation capabilities is crucial to the sustainable growth and long-term development of an enterprise. Shengke Nano insists on building and cultivating teams and focusing on the cultivation of industry talents. Relying on 20 years of technology accumulation and experience accumulation, it has a complete talent cultivation mechanism and has cultivated a large number of outstanding talents.

Li Xiaomin knows that the development of the semiconductor industry cannot be separated from excellent talents, and the cultivation of talents is the responsibility of enterprises, which can also provide incremental growth for the market, so as to jointly build a good industry ecology with sustainable development. With such persistence, Shengke Nano has been moving forward on the road of actively exploring new models of talent cultivation, and has never stopped. Through cooperation with domestic and foreign universities, industry associations and other parties, it has carried out in-depth optimization and integration of industry-university-research practices, clarified research directions and talent cultivation goals, and through continuous investment and efforts, it has helped promote the sustainable development of the industry.

In 2023, Sembcorp Nano established the Semiconductor Academy and launched the Master of Science in Technology and Design (IC Design, Failure Analysis and Reliability Analysis) program with the Singapore University of Technology and Design (SUTD). This also marks that Sembcorp Nano is not only the "chip hospital" of the international semiconductor industry, but also a base for cultivating professional talents needed by the "chip hospital". The educational philosophy of Sembcorp Nano Semiconductor Academy emphasizes the deep integration of industry, academia and research, aiming to cultivate practical and scarce talents who can adapt to the rapidly changing semiconductor industry.

Li Xiaomin said that the training of semiconductor talents is extremely long and expensive. In recent years, Sembcorp Nano has been focusing on the training of fresh graduates, accepting a large number of interns every year, and continuously increasing the number of fresh graduates admitted, accumulating a lot of experience and technology in talent training. Talent is what the entire industry needs most in the future. Sembcorp Nano's talent training plan can inspire peers to focus on talent growth in the future.

Li Xiaomin said: "When you have leading scientific and technological innovation capabilities and a complete innovation mechanism to actively create incremental markets and incremental talents, you will not worry about any internal competition. This is where my confidence comes from."

Looking ahead, Sembcorp Nanotech looks forward to engaging in multi-dimensional exchanges and cooperation with domestic and foreign universities and academia to jointly cultivate more international, high-quality scientific and technological talents and continuously inject new vitality into the development of the semiconductor industry.