Implement Big Brand Strategy to Create 100 Billion IC Design Industry

"This year, China's integrated circuit design industry has made considerable progress in terms of sales revenue, technology research and development, and market share. It continues to maintain its vitality. The integrated circuit design industry should become integrated and link IC design, chip manufacturing foundry, and packaging. The important driving forces of testing, application solutions, channel providers, and operators have become the core elements of building a strategic emerging industry value chain."

"Although integrated circuit design was originally a relatively weak link in China's integrated circuit industry, it has accounted for more than 20% of China's integrated circuit output value in recent years. Even in the international financial crisis, the market has shrunk, and the monetary base has been tightened. Under the environment, when China's integrated circuit manufacturing and packaging industry declined significantly, the design industry still maintained a growth rate of more than 10% and stood out. This year's situation was more optimistic, with a year-on-year increase of 44.59%." Talking about China's integrated circuit design industry, Wang Qinsheng, chairman of IC Design branch of the China Semiconductor Industry Association, expressed a bit of pride. Recently, Wang Qinsheng accepted an exclusive interview with reporters from China Electronics News regarding the overall performance, industrial characteristics, development strategies, and future goals of the integrated circuit design industry in China.

40 times in 10 years

The design industry is the source of the development of the integrated circuit industry and the driving force for the development of the entire industry. "The rapid growth of the IC design industry in recent years reflects the importance and objective need to prioritize the development of the design industry." Wang Qinsheng said, "The booming development of the IC design industry benefits from technological innovation, thanks to integrated circuits. The expansion of the application field has benefited from the warming up of domestic and foreign markets. According to incomplete statistics, China's IC design industry is expected to achieve sales of 55 billion yuan in 2010, an increase of 44.59% year-on-year. This reporter learned that in 2000, The total sales revenue of China's integrated circuit design industry was only 1.25 billion yuan, and only four companies had sales of over 100 million yuan; in 2010, China's IC design industry not only saw sales increase more than 40 times, but also With sales revenue of 7 companies reaching a scale of over 200 million U.S. dollars, Hass Semiconductor's sales revenue has crossed the threshold of 700 million U.S. dollars; and the sales revenue of nearly 10 companies has reached 100 million to 200 million U.S. dollars. "Compared with 10 years ago, there is a huge difference between today's situation," said Wang Qinsheng.

Accompanied by the increase in sales revenue is a substantial increase in corporate profits. According to Wang Qinsheng, in the first half of this year, the profits of Hangzhou Silan Microelectronics increased by more than 6 times year-on-year, achieving a net profit of 119 million yuan; the national technology realized a profit increase of more than 100%. Between 2006 and 2009, because the development prospects are not optimistic, the capital market has been far away from the integrated circuit industry; but this year, the outstanding performance of the integrated circuit design industry has allowed the capital market to return to refocus on the industry. Wang Qinsheng told reporters: “In the past year, there have been five IC design companies listed at home and abroad, and 12 companies will be listed. Due to the return of the capital market, China’s IC design industry will continue to grow. ”

IC research and development has achieved remarkable results. A number of integrated circuit design companies have developed new products with high-tech content. Speaking of the technological innovation of China's integrated circuit design companies, Wang Qinqin is very famous: In the 3G and quasi-4G areas, Spreadtrum, RDA, ZTT, and Gecom have introduced new products; Xi'an Microelectronics has developed the core of the Internet of Things chip “Tangxin No. 1” is an ultra-low-power RF programmable system-on-chip with an integrated frequency of 2.4GHz; Beijing Chuangyi Video Co., Ltd. cooperates with the Hong Kong Applied Science Research Institute to develop the world’s first 20-bandwidth TD-LTE terminal baseband communication. The chip was successfully applied at the Shanghai World Expo; the world’s first 100Gbps carrier-class Ethernet core chip developed by Suzhou Shengke Network adopts a 65-nanometer process; Guangzhou New Shore launched the world’s first 40nm ARMA9 dual-core 2.0G high-performance computer System Chip ... "In short, this year China's integrated circuit design industry has made great progress in terms of sales revenue, technology research and development, and market share, and it has continued to develop." Wang Qinsheng said.

Implement a big brand strategy

The prosperity of the integrated circuit design industry is only an indication of the "Creation in China" has made a gratifying first step; to achieve the sound development of the industry, we must also pay attention to "Made in China." Wang Qinsheng said that the so-called "Made in China" is not a low value-added, low-end manufacturing industry in the ordinary sense. "Made in China" requires innovative products, requires the construction of a complete industrial chain and value chain, and must implement a big brand strategy.

Today, the IC design industry presents two development dimensions: vertical and horizontal. Wang Qinsheng believes that the vertical development of integrated circuit design industry is to strive to improve the scientific and technological content, and it has made remarkable progress in catching up with the international advanced level. The “01 special item” and “02 special item” implemented by our country reflect the strategy of in-depth development. Horizontal development is the implementation of a big brand strategy for large-scale and wide application areas with the support of the state and increasing the market share of domestic integrated circuits. The IC design project implemented by the National Development and Reform Commission is an important part of the brand strategy. According to Wang Qinsheng, under the guidance of the National Development and Reform Commission, in April last year, China Semiconductor Industry Association integrated circuit design branch organized industry enterprises to analyze the feasibility of market and special implementation, and put forward five areas for implementation of the special project, ie, smart cards. Chips, communications chips, multimedia chips, security chips, and power and power product chips. "Our goal is to use 3 to 5 years, so that the localization rate of integrated circuit chips in these areas can reach 50% to 70%." Wang Qinsheng said.

The reporter learned that the main tasks of the integrated circuit design project implemented by the National Development and Reform Commission are: to support a wide range of integrated circuit products; encourage qualified companies to integrate domestic IC design resources, and guide integrated circuit companies to speed up reorganization and foster growth. A batch of key enterprises; to enhance the linkage between integrated circuit design companies and chip manufacturing companies, to build a more complete vertical division of labor system, and enhance the core competitiveness of the industry.

"At present, after two rounds of approval, 27 companies have been short-listed." Wang Qinsheng said, "If the industrialization of these five areas is successfully implemented, the overall sales revenue of China's integrated circuit design industry will break through within three to five years." 100 billion yuan."

Wang Qinsheng said that China's integrated circuit design industry should implement a big brand strategy and should also rectify the Shanzhai products. Taking mobile phones as an example, in recent years, China's mobile phone chip market is indeed very active, but 40% of them are Shanzhai products, which is very unfavorable to the implementation of the big brand strategy.

Open up a new value chain

“The integrated circuit design industry should become an important driving force for integration and linking of integrated circuit design, chip manufacturing foundry, packaging and testing, application solutions, channel providers, and operators, and become a core element in building a strategic emerging industry value chain.” During the interview, Wang Qinsheng repeatedly emphasized to reporters the importance of creating a value chain.

“To create a brand new industrial chain and value chain, it is necessary to change the existing business model and let the design industry and chip foundry, packaging and testing to achieve a new combination.” Wang Qinsheng said, "For example, to reduce the power consumption of products, In addition to improvement at the design level, at the same time, the potential of the process must be exploited. From the start of research and development, it should be closely integrated with the process. This combination can be a capital-level intervention, and it can also form an industrial alliance or a strategic alliance.”

Wang Qinsheng stated that from the perspective of the value chain, the development strategy of integrated circuit design companies must match the needs of operators. For example, the promotion of 3G mobile phone applications has brought a lot of market opportunities to some Chinese design companies. In addition, the development strategy of integrated circuit design companies also needs to be in line with the needs of the government. For example, Guangdong Province is pushing the “Southern Card One” and is currently piloting in five cities. Design companies should understand more about the government’s demand for related products and should pay attention to The government's bid because the government tender has a relatively high standard.

The shortage of OEM production capacity has also caused certain restrictions on the development of China's IC design industry. “Such as Yiyi Innovation has been working with domestic OEM companies for a long time, and can get a large number of NORFLASH mobile phone payment orders, but because they can not get the capacity, ultimately unable to undertake this project.” Wang Qinsheng said, “I hope Domestic chip foundry companies must support the development of domestic design companies, and allow sufficient capacity for design companies to avoid the imbalance in supply and demand of domestic integrated circuit foundry capacity."

When referring to the "12th Five-year Plan" development goal of China's integrated circuit design industry, Wang Qinsheng said that from the perspective of industry scale, China's five design companies will have sales revenue of more than one billion U.S. dollars, and 20 design companies will have sales revenue exceeding 3%. Billion US dollars, 30 to 50 design companies have sales revenues of more than 100 million U.S. dollars. From a technical point of view, at present, we have 8% to 10% of our products entering the 65nm process node. By 2015, high-end products will enter the 32nm process node, and high-end products required by major government projects will realize autonomous supply.