Cutting-edge technology. 2｜The pain of de-technology: "Silicon Harbor" is still in a fetus and falls into a vicious circle｜01 Weekly

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Written by: Yang Yingwei

2021-06-21 20:00

Last update date: 2021-06-21 20:00

Another obstacle for Hong Kong to build a high-tech industry is the shortage of high-tech enterprises.

"Hong Kong has three centers, shipping, trade, and financial centers, but only these three centers are unsound." Chen Qingquan said, "We must also include high-tech companies, such as sensors, medical technology and other high value-added Land-occupied companies.”

This is the second part of a series of reports on Hong Kong's cutting-edge technology development

To undertake the above:

cutting-edge technology.

1｜How Hong Kong takes advantage of this opportunity to build a new Silicon Valley in the world

Hong Kong once gathered a large number of international high-tech companies and even factories, such as Philips, Motorola and other leaders in the electronics industry in the past. They have set up R&D centers and factories in the Asia-Pacific region in Hong Kong.

Overlapping "decolonization" and "return", Hong Kong's economic sector has undergone large-scale "de-industrialization", a large number of factories have moved away, and the R&D and testing departments of technology companies have also moved north with the factories.

The Science and Technology Park Corporation currently has facilities in Tai Po Industrial Estate for the industry to carry out intelligent production processes, and related facilities in Tseung Kwan O Industrial Estate will also be completed.

(Profile picture)

Can't keep the advanced technology production line

Looking back, Hong Kong has lost much more than "industry". The accompanying "de-technology" has a far-reaching impact.

Technology companies and factories have trained a large number of experienced engineers. They were unemployed, changed jobs, and left Hong Kong; the innovation and technology seeds cultivated in colleges and universities chose to go north due to lack of industry, and it was difficult to create "unicorns" locally; middle-level blue-collar jobs were greatly reduced , Not only hindered upward mobility, but also exacerbated the gap between the rich and the poor; young people’s willingness to enter the technology industry was also greatly reduced, and the prospects for science and engineering talents were slim...

"I used to live with hundreds of thousands of 8051 chips every day, are you familiar enough with me?" said Liu Zhentao, CEO of Hengguang Semiconductor Technology Co., Ltd.

He enrolled in the Department of Electrical and Electronic Engineering of the University of Hong Kong in the 1980s and later worked in Motorola's Hong Kong branch factory.

In his sixtieth year, he has restarted his business in recent years and developed chip-controlled six-phase DC brushless motor technology.

During the interview, Liu Zhentao kindly referred to Motorola as "Mo Ji", and often recalled Hong Kong's "prestigious history" in the chip industry. Finally, he could only lament that Hong Kong is now "the general trend is gone."

The entrepreneurial team of Hengguang Semiconductor (Co., Ltd.) has two engineers from Motorola (Hong Kong), namely CTO Li Zhansheng (second from left) and CEO Liu Zhentao (second from right).

(Profile Picture / Photo by Gong Jiasheng)

Why can a small chip cause an international "technology war"?

Liu Zhentao pointed out the reason. The chip alias is also called "integrated circuit", which is to integrate complicated electronic circuits on a small, low-cost chip. "You can use a lot of large parts to achieve this, or you can use one chip. It's a bit-saving and cheap chip to do it." Choosing the latter is a natural move for technological development.

Liu Zhentao pointed out that the material cost of the chip is not expensive. "The raw material is only sand." However, the cost of research and development is relatively high, and the requirements for equipment and talents involved in the process are relatively high.

It can be seen from this that the chip industry is actually a capital-intensive and technology-intensive industry. It is a high-value-added industry, and it also fits Hong Kong’s transition to a high-value-added knowledge-based economy.

In fact, Hong Kong once had the leading chip industry chain in Asia.

According to the 1992 US Congress delegation survey report "Oversight Visit to the Pacific Far East", Motorola Semiconductor Hong Kong Co., Ltd. was established in 1967 as the center of Motorola's semiconductor division in Asia Pacific.

In 1982, Motorola established a production test center and engineering laboratory in Kwai Fong; in 1986, an advanced integrated circuit design center was added; in 1988, a fully automatic integrated circuit assembly center began to operate, and in the same year, the "Silicon Harbour Center" (Silicon Harbour Center) was opened. ) Project planning: In 1990, the "Silicon Harbor Center" in Tai Po was completed, which was the second largest semiconductor testing and assembly plant in Asia at the beginning of the 21st century, capable of testing 5.2 million wafers per week.

Hengguang Semiconductor’s engineers are demonstrating the company’s flagship product "three-phase six-wire motor."

(Profile Picture / Photo by Gong Jiasheng)

The production lines set up by foreign companies such as Motorola in Hong Kong have cultivated a large number of experienced engineers and created the booming electronics industry in Hong Kong.

"Engineering does not require genius, but it requires experience." Liu Zhentao attributed his entrepreneurial confidence to "Mo Ji": "Ordinary people researched the six-wire motor and found a few chips and gave up. But we are not doing engineering, and found that there is none in the market. , We know how to write, it is a business opportunity!"

Liu Zhentao recalled that Motorola had a Technical Ladder (technical ladder) promotion channel at that time, "I am very "buy" concept." He explained that after entering the factory, he started as an engineer, and if he did not want to manage after reaching the sixth level, Can continue to follow the Technical Ladder, continue to be a seventh-level engineer, and get promoted all the way, "retaining a lot of experienced talents."

However, due to the rapid increase in land and labor costs, Motorola's factory announced its closure in 2002, and the production lines were moved to Tianjin and Kuala Lumpur. Later, the "Silicon Harbor Center" was also converted into an office building for Phoenix Satellite TV.

Liu Zhentao believes that "political factors" and the government's "lazy rationale" are behind the industrial exodus: "The British know that it will be returned in 1997, and they will not make long-term investments. In addition, the Hong Kong government has focused on one aspect, and the industry has not developed. "

After the return of Hong Kong, Tung Chee-hwa assumed the post of chief executive. He appointed Tian Changlin, the former president of the University of California, Berkeley, as the chairman of the Hong Kong Innovation and Technology Committee, which promoted the completion of projects such as the Cyberport and Science Park.

The picture shows Tung Chee-hwa giving a speech at the Solidarity Hong Kong Fund Forum he established.

(Profile picture)

In fact, the SAR government after the reunification did not neglect technology and industry.

After Tung Chee-hwa took office, he immediately appointed Tian Changlin, the former president of the University of California, Berkeley, as the chairman of the Hong Kong Innovation and Technology Committee, which promoted the completion of projects such as the Cyberport and Science Park.

In terms of chips, Tung Chee-hwa has also named the photomask (key component in chip design) project under Shougang Group to government officials to consolidate the local chip design industry.

Now that the Chief Executive has already expressed the importance of science and technology, where is the problem?

Chen Qingquan told the truth.

At the beginning of the reunification, he served as the chairman of the Hong Kong Engineers Association, leading a team to investigate the industrial development of countries such as Singapore and Finland, and even throwing an olive branch to Nokia in Finland and inviting it to build a factory in Discovery Bay.

Tian Changlin also plans to promote the technology stock market, "Similar to the current "Science Innovation Board", I specially invited Xu Dalin to give us a report on how he successfully invested in Silicon Valley."

A series of high-end high-tech and high-end industrial projects that Tian Changlin, Chen Qingquan and other scientific and technological experts worked so hard to promote were ultimately unsuccessful due to political resistance-the two directors of the "three divisions" took the lead in opposition during the promotion of the project.

The picture shows Hong Kong's first academician of the Chinese Academy of Engineering, Chen Qingquan.

(Profile Picture / Photo by Gong Jiasheng)

Dalin Xu is the founder of the technology venture capital company Hambrecht & Quist, and he is famous for investing in the Asia-Pacific chip industry.

In 1999, Xu Dalin proposed a "Silicon Port" plan to establish six chip factories in Hong Kong, hoping to cooperate with Taiwan's semiconductor engineer Zhang Rujing to transplant the development experience of Taiwan's science parks to Hong Kong.

However, a series of high-end technological and high-end industrial projects that Tian Changlin and Chen Qingquan worked so hard to promote were ultimately unsuccessful due to political resistance-the two directors of the "three divisions" took the lead in opposition during the promotion of the project.

"Those high-ranking officials have no knowledge of technology at all!" Chen Qingquan talked about it now, and still couldn't help making a big shot. "Didn't you ask me Motorola? That Taiwanese chip company also wanted to come to Hong Kong, but in the end it was because Hong Kong did not give it. I went to Shanghai. Isn't it a normal thing to ask for land? But those high-ranking officials opposed it!"

In 2000, Xu Dalin stated that Handing Asia Pacific abandoned the "Silicon Port" plan in Hong Kong and moved the plan to Shanghai for implementation.

He said that this is mainly because Shanghai is willing to provide land on almost rent-free terms, and tax exemption for the first five years, and tax cuts in half for the next five years, but the Hong Kong government is unwilling to retreat.

As a result, "Silicon Harbor" was renamed "SMIC" after its landing in Shanghai, and it was listed on the Hong Kong Stock Exchange and the New York and London Stock Exchange four years later.

Today, SMIC has grown to be the only chip manufacturer in China with an energy production of 14 nanometers, and it is also one of the top ten chip manufacturers in the world.

In July last year, SMIC returned to the Shanghai Stock Exchange from the New York Stock Exchange, and it surged 202% on the first day of listing.

According to SMIC's 2020 annual report, as of the end of the year, SMIC's market value reached HK$260.2 billion.

SMIC is China's largest chip manufacturing company.

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Old people change jobs and leave Hong Kong, new people don’t want to join

After the large-scale reshuffle of the industrial structure, Hong Kong's technological development has also followed "de-industrialization" to a downward slope, which was first reflected in the human resources of the technology industry.

"In the 90s, when I was in my forties, the company opened seven digits to dig me out manually." Liu Zhentao said proudly. This is "you get what you pay for," and the labor is high because he was able to reduce revenue from US$60 million. Achieve 390 million US dollars.

At that time, the technology in the industry had just switched from analog to digital. Liu Zhentao chose to study digital in the Department of Electronics of Hong Kong University. He started to learn the basics of integrated circuits and had solid experience.

"You have to test the 30 or so part numbers of my logic gates, and I can answer you all!" Liu Zhentao gave an example. After entering the industry, he solved a problem that Motorola's US headquarters could not solve in two years. "You can imagine, before There is a class of people like me in Hong Kong!"

Hengguang Semiconductor CEO Liu Zhentao lamented that after Motorola left Hong Kong, a large number of engineers changed jobs and left Hong Kong.

(Profile Picture / Photo by Gong Jiasheng)

The reporter then asked: Are these people still in Hong Kong?

Liu Zhentao replied: "It seems like I'm such a "simple" engineering man!" He said that after Motorola left Hong Kong, these engineers switched to management, business, and politics. Like him, they were willing to stay in Hong Kong Electronics. There are only a handful of people in the engineering industry who "have not starved to death".

Liu Zhentao also mentioned that Singapore began to promote the development of the chip industry in the 1980s and came to Hong Kong to "pry" engineers.

"As soon as my colleague passed by, (lived) in a 2,100-square-foot (house)!" Liu Zhentao recalled that Chartered Semiconductor, where he joined, was later acquired by Global Foundries, the world's third largest chip manufacturer.

He lamented that while Singapore’s salary levels were more than twice as low as Hong Kong’s back then, the current situation has reversed.

What is even more embarrassing is that Hong Kong has lost far more than experienced engineers, and even fewer young people are willing to join the industry. Science and engineering courses are more difficult, but the employment prospects are far less than those of professionals such as finance, medicine, and teachers.

There is already a "vicious circle" between cultivating the technology industry and cultivating scientific and technological talents. Although the government chants the slogan of promoting the development of innovation and technology, it is difficult to change the status quo.

There are fewer and fewer young people in Hong Kong willing to enter the technology and engineering industries.

The picture shows the engineers of Hengguang Semiconductor debugging the product.

(Profile Picture / Photo by Gong Jiasheng)

Professor Tang Xiwei of the School of Economics and Business Administration of the University of Hong Kong pointed out in the article "Hong Kong's Need for the Third Economic Transformation" that local university students choose to study medicine, education or business administration in order to achieve stable and high salaries, rather than science or business management that can help drive economic growth. Engineering, "An important reason is that the labor market does not provide opportunities for science and engineering graduates to apply what they have learned."

What does it mean that there is no "opportunity to apply what you have learned"?

Consider a set of employment data.

At present, public institutions still retain a large number of engineering departments, so there are not many graduates.

In 2018/19, engineering and technology graduates accounted for more than 20% (see Table 6), but the number of engineers who graduated after graduation accounted for only 7.3% (see Table 7).

In contrast, graduates of business, medical, and education departments accounted for 20.8%, 8.9%, and 2.9%, respectively, but the proportion of related employees ranked in the top three, respectively 19.3%, 8.9%, and 8.31%.

To put it simply, the success rate of business graduates who can find a professional job is as high as 90%, but that of engineering is only about 30%.

From the perspective of salary, the popular industry is still far ahead.

According to the "Investigation Report on the Employment Status of College Students in 2020" released by the job search website JobsDB, among the industries with the highest starting salaries, engineering and information technology rank sixth and ninth respectively, but they are still relatively large compared to medical, real estate finance and other industries. Gap (see Table 8).

The report also pointed out that for two consecutive years, the government and public organizations have become the top job choices of all students surveyed, accounting for 14%, followed by the banking industry, accounting for 8%.

Hengguang Technology President Li Zhansheng is an engineer from "Mo Ji" together with Liu Zhentao.

After experiencing the golden age of technological development, he is now a parent.

Li Zhansheng’s views on the electronics industry have also changed from bright to dark as Hong Kong’s "de-technization" progresses. "I am a little worried when I see children's mathematics "smart"," he said helplessly. To vigorously promote STEM education, such as building Lego and robots, "You tell this class of people who really like STEM to join in what business later? As a parent, when I see a child picking up a screwdriver, I hit him with a ruler. Stomp! Hit him until he is "stunned", hit him until he "Don't dare to pick it up"."

The government has been vigorously promoting STEM education in recent years, such as building Lego and robots. But what career should Hong Kong youth who really like STEM devote themselves to?

(Profile picture)

Rethinking "re-industrialization" should promote re-technology

Industry and high-tech enterprises are dependent on each other. The loss of industry means the loss of the industrial environment, enterprises and talents for the development of innovation and technology.

In 2016, the SAR government included "re-industrialization" in the Policy Address for the first time, but five years later, according to the Census and Statistics Department in 2019, the manufacturing GDP accounted for only 1.1%.

Hong Kong's industrial development is still not a climate, let alone bring changes to the innovation and technology environment.

The key pain point is that Hong Kong is only in response to the global trend of "re-industrialization" to wave the flag and shouting "re-industrialization", but in fact it neither re-examines Hong Kong's industrial soil nor understands the interdependent relationship between "industry" and "technology". As a result, doing things and doing things is nothing more than upgrading the low-end manufacturing industry, not the "re-industrialization" of "re-technology".

The term "re-industrialization" was first mentioned in the 2016 Policy Address: On the one hand, it is the transformation and upgrading of traditional industries, using smart production, digitalization and other methods to improve the production efficiency of traditional industries; on the other hand, it focuses on the advantages of scientific research. , Advanced manufacturing created by high value-added products, such as Hong Kong's superior medical technology, advanced materials, precision instruments, etc.

The Hong Kong government promotes re-industrialization, hoping to promote the upgrading and transformation of manufacturing into high value-added industries.

(Photo by Lu Yiming)

Although both are included in "re-industrialization," their goals are completely different.

The focus of the former is to improve productivity, while the focus of the latter is to create new industries and connect with upstream scientific research advantages, which is more difficult than the former.

Having said that, the importance and long-term benefits of the development of advanced manufacturing are higher than traditional industrial upgrading, and it is more in line with Hong Kong’s goal of building an "international innovation and technology center" because it can not only host senior researchers and engineers, but also Gather the power of enterprises to jointly tackle the cutting-edge scientific research.

It’s just that, five years later, most of Hong Kong’s current "reindustrialization" projects focus on upgrading traditional industries. In terms of promoting advanced manufacturing, resources are not fully invested and infrastructure construction is slow. Therefore, many entrepreneurs have come out of university laboratories. The team chose to go north, and "technology" is still difficult to contribute to Hong Kong's GDP as an industry.

Li Shaobin, Chief Digital Director of the Productivity Development Council, believes that the "Reindustrialization Funding Scheme" can help Hong Kong's manufacturing GDP increase by about 50%.

(Photo/Photo by Ou Jiale)

In terms of resource allocation, the Innovation and Technology Bureau launched the "Reindustrialization Subsidy Scheme" in July 2020 to provide Hong Kong companies with one-third (up to a maximum of $15 million) subsidies for smart production lines.

Li Shaobin, Chief Digital Director of the Productivity Development Bureau, calculated a sum. If calculated on a full scale, the planned 2 billion yuan can help about 130 companies to set up production lines, and the output value of each production line is 100 million yuan. An increase of about 50%.” However, cutting-edge technology products mainly come from R&D patents in universities and research institutes.

The funding of entrepreneurial teams in colleges and universities has always been short. If you want to put these projects in Hong Kong to establish a production line, it is difficult to bear the remaining two-thirds of the construction costs.

In other words, the "funding scheme" will benefit companies with good capital flows or financial resources, ignoring start-ups with cutting-edge technology but short financial resources.

For example, in the above, Chen Qingquan mentioned that the "sensor" is a technological product that has the conditions to establish a production line and even an industry in Hong Kong because of its high output value and small area.

Lance Technology Co., Ltd., which was born out of the laboratory of the Chinese University of Hong Kong and focuses on industrial gas sensors, currently has branch companies in the Science Park and Shenzhen Qianhai.

The CEO of the company introduced to reporters that after the country proposed "carbon neutrality", the demand for gas sensors in heavy industries such as the petrochemical and electric power industries in the mainland has greatly increased. The cost of the company’s current multi-gas simultaneous measurement sensor is about 200,000 yuan. The price is about 500,000 yuan, and the target is a gas monitoring solution that is more than twice the price provided by industrial technology giants such as Figaro, ABB, and Areoqual.

Lance Technology's sensors can be described as local technology products with both "cutting-edge technology" and "high value-added", but ultimately they did not choose to produce them in Hong Kong.

Li Xing said that Hong Kong was first considered when building a production line at that time, because the laser components of the product had to be purchased from abroad and coincided with the Sino-US trade war, Hong Kong was "relatively safer."

After the company landed, Licensing and the Productivity Development Bureau and a few local friends discussed the possibility of setting up a production line in Hong Kong. "The conclusion is that our products are not easy to package in Hong Kong." Li said that the trade war is a short-term after all. The impact, and the parts of the product are also seeking domestic manufacturers to replace the supply. "After that period of time, Hong Kong's advantages have become less obvious."

The license points out that the main restrictions are land and industrial environmental issues.

In terms of land, in order to obtain government or science park funding, the company must reach a certain size. "The company that is a robot downstairs can be packaged in Hong Kong, but for new entrepreneurs like us who have core technology, it’s not too much. Realistic.” In terms of the industrial environment, Licensing explained that start-up companies must race against time and pay more attention to “current resources”. Naturally, they tend to land in Shenzhen, which has a mature industrial environment. “We can find many shared production lines in the Mainland without having to start from scratch. Just build it, and directly transform it.” On the other hand, Hong Kong's industry has been completely eliminated and does not have the above conditions.

The CEO of Lance Technology stated that in order to obtain funding from the government or the science park, the company must reach a certain size.

The picture shows the Hong Kong Science Park.

(Profile picture)

In addition, there is also the problem of "application scenarios", because Lance products are mainly for heavy industrial industries such as petrochemicals and electric power, but there are no such factories in Hong Kong, and Lance products are mainly tested in the Mainland.

"You can complete a machine in the laboratory, you can do it very well. But if you put the machine on site, you have to consider the factory environment, the difference in the habits of the workers in using the machine, etc." Li emphasized that if you want to design a "Standardized products" must go to "field testing" and "collecting information" in more application scenarios to find commonalities and gradual optimization. "This is very important to us."

According to the article "Hong Kong's Reindustrialization Needs a Clearer Positioning" by the Hong Kong Center for Sustainable Development, City University of Hong Kong, the approved innovation and technology fund for "Electrical, Electronic and Optical Products" has the highest amount of 3.7 billion yuan (31.6% of the total), but Its contribution to manufacturing GDP is only 1.3 billion yuan, which is almost the industry with the lowest contribution (see Table 9).

The article pointed out that “the innovation fund focused on enhancing the R&D intentions and capabilities of local enterprises and scientific research institutions, but did not provide sufficient support at the same time to transform R&D results into practical products.” This resulted in many R&D projects failing to be "industrialized." It also failed to promote the improvement of productivity in various manufacturing industries.

Lance Technology’s industrial sensors are the best example. Such cutting-edge technology products that have emerged from the laboratory cannot be "industrialized" locally. Naturally, the production capacity of the technology industry in the "re-industrialization" will continue to be lost, far away from the "re-technology". the goal.

In addition to the lack of industrial support for the technology industry, there is also a lack of large and medium-sized leading technology companies in the territory of "re-technology".

"How do we integrate into the ecology of the Greater Bay Area, and where does Hong Kong occupy?" Ni Mingxuan also wondered: "Hong Kong has many schools and good basic scientific research, but basic scientific research involves investment, money for equipment, and hiring of people. When it comes to output, it makes money. That part of it went elsewhere. Are we a bit at a loss?" He hopes that Hong Kong will provide preferential terms for high-tech companies to attract them to set up headquarters in Hong Kong.

Ni Mingxuan, the vice president of the Hong Kong University of Science and Technology, said: "There are many schools in Hong Kong and basic scientific research is good, but basic scientific research involves investment, money to buy equipment, and hiring people. When it comes to the output and the profitable part, it goes to other places. , Are we a bit at a loss?” (Photo/Photo by Ou Jiale)

Chen Qingquan also recalled that when investigating technology in Singapore, he found that the local area did not hesitate to attract leading oil refining companies to set up factories.

"Officials told companies that you can ask for land, but you have to cultivate talents for Singapore." Chen Qingquan explained that as a condition of exchanging land, Singapore requires oil refineries to set up local research institutes and send experts to train local youth. "Five years After the knowledge is updated, the company has to send new experts."

The words of the two scholars unanimously pointed out the importance of leading technology companies to the development of innovation and technology in Hong Kong.

For example, in the past there was "Mo Ji" to cultivate talents, contribute output value, and promote technological and economic development for Hong Kong.

However, today's Hong Kong is hardly positive towards technology companies.

In the 2020 Policy Address, in order to strengthen the function of the financial center, the SAR government has provided financial companies with a number of preferential policies, such as relaxing restrictions on real estate funds, providing tax relief for private equity funds, and setting up marketing teams to promote them. Hong Kong sets up family offices, etc.

But when it comes to innovation and technology, there are only two talent programs, the "Outstanding Innovative Talents Program" and the "Greater Bay Area Youth Employment Program," without mentioning any investment attraction for technology companies.

The above is excerpted from the 270th issue of "Hong Kong 01" Weekly (June 21, 2021) "How to use "Cutting-edge Technology" as a national policy to build a new Silicon Valley in the world".

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Highlights of the 270 issue of "Hong Kong 01" Weekly News:

[Cover report] "Cutting-edge technology" is included in the national policy, how to build a new Silicon Valley in the world

Can Hong Kong people turn a blind eye to the hundred years of the Chinese Communist Party?

The Shenzhou 12 manned spacecraft, the Chinese enter their space station for the first time

The charm of hand-made: interest turns into business, the industrial chain gradually takes shape

Let players "rule the world" blockchain subverts the traditional game model?

Turning search into a dialogue language AI fears to inherit human prejudices

Reindustrialization Innovation Technology Bureau Innovation Technology Innovation Technology Industry TSMC Silicon Valley SMIC Engineer Startup Startup Startup Science Park Science Park 01 Weekly Report In-Depth Report