IC Industry Base

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Entering the seventh year: China's three major IC industrial bases move from dream to reality
　　
　　Author: He Xudong, Sun Changxu
　　
　　
　　In Shenzhen, more and more newly established IC companies want to move into the Shenzhen IC Design Industrialization Base because "the atmosphere of the base is good". There are not only complete supporting facilities, but also a fair and open competition environment facing the market, and more high-spirited entrepreneurial passion. It is a gathering place for IC entrepreneurial heroes. Many depressed IC companies have regained vitality and flourished after entering the base. In addition to Shenzhen, there are 7 IC design industrialization bases in Beijing, Shanghai and other places. These industrialization bases, which were established in 2000, have entrusted the glory and dreams of the IC industry.
　　
　　Different bases have different industrial dreams due to different investment environments and entrepreneurial groups. Beijing, Shanghai and Shenzhen, as the three largest bases in China, play different roles in the IC industry chain with their own characteristics. How do these bases realize their respective industrial dreams in the seventh year?
　　
　　Location: The respective advantages of the three major IC industrial bases
　　
　　In 2000, the global semiconductor market entered a downturn. But for the Chinese integrated circuit market, 2000 is of great significance, because from this year on, China has approved the establishment of 7 national integrated circuit design industrialization bases, making bold attempts to develop the IC industry. Although the services provided by the three major bases in Beijing, Shanghai and Shenzhen are roughly similar to those provided to IC companies, they have their own characteristics due to the different industrial environments and existing resources in different places.
　　
　　Zhao Jianzhong, deputy secretary-general of the Shanghai Integrated Circuit Industry Association, said: "The biggest advantage of the Shanghai area is that IC design companies are very convenient in financing, and the IC industry chain is relatively complete." In addition, the Shanghai base has built a complete public service platform that integrates integrated circuit design platform, professional testing platform, training and information services. Enterprises can enjoy the professional EDA design tools, MPW services, various tests, training and information services of the public service platform at low cost without leaving home.
　　
　　However, Zhao Jianzhong also pointed out that compared with Beijing and Shenzhen, the application environment of the Shanghai base is relatively lacking. For example, there are large product application companies such as Lenovo and Founder in Beijing, and companies such as Huawei and ZTE in Shenzhen. However, he believes that the Shanghai IC industry has development potential. At present, there are more than 400 IC design companies in China, of which more than 130 are located in Shanghai, which has a strong group effect.
　　
　　Another problem of the Shanghai base is the difficulty brought by the management of different areas, which makes the Shanghai base not have a united and passionate atmosphere like the Shenzhen base. Zhou Shengming, deputy director of the Shenzhen Integrated Circuit Design Industrialization Base Management Center, proudly said: "IC companies in Shenzhen all want to enter the park. The current area is far from enough, so we will move to the new base soon." He revealed: "HiSilicon, Zhuhai Actions and other companies want to move to the Shenzhen core incubation base."
　　
　　Zhou Shengming believes: "Shenzhen's market and complete machine companies are relatively strong." The Shenzhen base has a wide range of radiation, including companies in Guangzhou, Zhuhai, Wuhan and other places. But he also admitted: "Shenzhen's industrial chain is not particularly perfect, and it is relatively weak in chip manufacturing and testing services." In order to make up for the shortcomings in the industrial chain, the Shenzhen base cooperates with the Hong Kong Science and Technology Park to provide testing and failure analysis services to Shenzhen base companies. It is reported that the cooperation between the Shenzhen base and the Hong Kong Science and Technology Park in the IC industry can enjoy government subsidies and support.
　　
　　Compared with Shanghai and Shenzhen, Beijing base has advantages in development environment, market conditions, technical foundation and talent resources. However, Hao Weiya, general manager of Beijing Integrated Circuit Design Park Co., Ltd., said frankly: "Talent training and industrial supporting (including IP, packaging and testing, and design services, etc.) are still the two major challenges facing Beijing IC design industry." He emphasized that the training of IC design talents is particularly important for the development of Beijing IC industry, and currently university education and vocational education cannot meet the talent demand. He called on the government, industry and relevant institutions to work together to solve the problem of scarce IC design talents.

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Entrepreneurs: Different composition in different places Most of the IC companies in the three major bases are design companies, founded by different types of entrepreneurs. Therefore, the composition of IC companies in different bases is also different. Hao Weiya from Beijing said: "Beijing's IC design industry has formed a pattern of three-way division among state-owned enterprises, foreign enterprises and private enterprises." He introduced that at present, in addition to about 100 IC design companies in Beijing, there are more than 20 IC design centers established by overseas companies. The number of IC design companies in Beijing is growing. Among them, more than 20 new companies are founded by returnees every year, which has injected new vitality into the development of the IC industry. Hao Weiya described the Beijing base as a place with profound heritage and crouching tigers and hidden dragons. Many returnee companies are developing high-end products in a low-key manner, such as mainstream products such as computers and communications. Hao Weiya said: "Once these low-key companies succeed, they will surpass some well-known domestic IC design companies." He revealed that the next company to go public like Vimicro may be these low-key returnee IC design companies. In the Beijing base, many local IC design companies are committed to product diversification and realizing the transformation from low-end to high-end, and have achieved certain results. For example, Datang Microelectronics' COMIP SOC has been used in Xinwei's Da Lingtong mobile phone, Haier satellite set-top box chips are widely used by export manufacturers in the southern region, Hisense is developing high-definition TV chips, and Sigma Microelectronics' audio chips are transforming to high-end. 70% of Beijing IC design companies have sales revenue, of which 30% have achieved profitability. Beijing's IC design industry has entered a virtuous cycle and is expected to blossom in 2009. Zhao Jianzhong from Shanghai also said that from the perspective of investment structure, Shanghai IC design companies include foreign-funded, overseas returnees and local companies, and their proportions are comparable. Zhou Shengming believes that "the overseas returnee companies in the Shenzhen base are developing rapidly." The design level, product grade and product technology of overseas returnee companies are relatively high-end, and they have basically obtained venture capital. Representative companies include Xinbang, Ankai, Tianli, and Lihe. Zhou Shengming analyzed that the reason why overseas returnee companies are developing rapidly is that they only need to invest 3 to 5 million RMB in the base, while in the United States, they must invest 3 to 5 million US dollars to have development opportunities. The base has reduced the financial pressure for the development of overseas returnee enterprises. Another feature of the Shenzhen base is that many distributors have transformed into IC design industry. For example, Changyuntong, Risong, Jiangbolong, Ted Semiconductor, etc., these companies rely on the experience of distributors, are familiar with the market and understand customers, so their products are faster in marketization. According to Zhou Shengming, among the enterprises in Shenzhen base, the sales of Guowei, Risong, HiSilicon and ZTE Integrated exceeded 100 million yuan in 2005. It is expected that in 2006, the sales of Xinbang, Ankai, Xinwei, Lihe, Tianli, Solomon (Shenzhen company), Aike and other enterprises may exceed 100 million yuan. 　　

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Eliminated companies: companies leaving the bases The three major IC industrial bases are not paradises for all IC design companies. In the bases, some companies took the first step towards success, while others fell into the abyss of failure. The law of competition of survival of the fittest is fully revealed in the three major bases. Zhou Shengming, deputy director of the Shenzhen Base Management Center, has done a statistical analysis. From 2003 to 2005, a total of 6 companies were eliminated from the incubation companies in the Shenzhen base. These companies were either deregistered or transferred their businesses. Among them, the failure case of Tianyi Integrated Circuit Company is the most representative. In 2002, Tianyi was founded by returnees and engaged in IP verification services. However, there were not many companies doing IP verification at that time. It was an emerging industry. No manufacturer was willing to pay for IP verification services. In addition, they did not understand the situation of the Chinese market, so Tianyi's business had not been developed. In 2004, the company went bankrupt. Zhou Shengming said that Tianyi's bankruptcy was because it was "born at the wrong time". It was a bit early to do IP verification service business in 2002, and the market had not yet started. But now it is different. The development of IP verification service business has become a general trend. It is understood that in 2005, Shenzhen enterprises purchased 25 IP verification services, and the market space is huge. For example, Huawei purchased an IP verification service worth 200,000 US dollars. Today, many foreign companies are developing IP verification service businesses. It is revealed that the original founder of Tianyi is preparing to make a comeback because he has always been optimistic about the IP verification service industry and wants to pursue his dream again in the Shenzhen base. In more than three years, although the Shenzhen base eliminated 6 companies, it established 5 new companies in 2004 and 2005. Zhou Shengming believes that the elimination rate of enterprises in the Shenzhen base was not high in the past few years, and there may continue to be business closures in the future. This is a normal phenomenon in the development of the IC industry. In Beijing, there are 150 companies that enjoy the national IC industry preferential policies, but only about 100 are actually engaged in IC design. Many companies are optimistic about the IC industry but have not entered the industry. Hao Weiya introduced: "In the past few years, IC design companies have been closing down." The reason is that the competition in the IC design industry is fierce and companies cannot make profits. Most of these bankrupt companies had developed products, but because of the wrong timing, they missed the best time in the market, entered the market when the market was declining, and were unable to achieve mass production and shipment. Hao Weiya further introduced that not many companies engaged in high-end product research and development went bankrupt, because companies engaged in high-end product design have strong strength and support from the government and other aspects, so they are not easy to go bankrupt and can wait for the best time to enter the market. Some companies in Shanghai have also closed down. For example, Hongrui Microelectronics, SiChuang Electronics, Minqin Electronics and some small design service companies. However, Zhao Jianzhong believes that China's IC design industry has not yet reached the time when the big ones will continue to prosper and the weak ones will be eliminated. He said: "With the continuous introduction of national policies to support the development of the industrial chain, China's IC design industry will have substantial development. It is expected that in five years, some IC companies in China will be eliminated or acquired. Zhao Jianzhong emphasized: "IC design is about seizing opportunities. "Successful IC companies in Shanghai include Huahong and Spreadtrum, and their success is due to "good timing." Some IC companies that make image sensors, although they have advanced technology, did not wait for the market and missed the opportunity for development. The same example is Beijing's Loongson and Ark, which have high technology levels but cannot enter the market.