Research Article Archive Versions 2 Vol 1 (1) : 18010105 2018
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Current Status of the Integrated Circuit Industry in China —— IC Design Industry
: 2018 - 08 - 17
: 2018 - 09 - 30
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Abstract & Keywords
Abstract: China's IC industry has been flourishing in recent years, huge market demand together with government investments are the major driving forces for this development. The status and development momentum of the Chinese IC industry also attracted wide interest and attention of international counterparts. A group of domestic IC experts are invited by the JoMM to write a series of articles about China's IC industry, including the history, current status, development, and related government policies. Information in these articles is all from public data from recent years. The purpose of these articles is to enhance mutual understanding between the Chinese domestic IC industry and international IC ecosystem.The following article is the first one of this series, the status quo of China's IC industry. The IC industry chain is very long including design, manufacturing, special equipment, materials, packaging and testing. The article series are arranged in accordance with this order.
Keywords: 
1.   China's IC Design Market
Since 2009, China's IC design industry entered a rapid development period, the industry sales revenue volume increased from 45.62 to 207.35 billion yuan, with a compound average growth rate (CAGR) of 20%. By 2016, China's IC industry sales revenue reached 433.55 billion yuan with a growth rate of 20.1%, among which the IC design industry revenue reached 164.43 billion yuan, an increase of 24.1%, which is significantly higher than the overall growth rate of the global IC design industry.


Figure1.   2009 ‒ 2017 China's IC design market sales trend
According to the domestic "Made in China 2025" project, "Internet +" project and as well driven by the increasing domestic and foreign investments, China's IC industry is expected to maintain rapid growth in 2018. During the next few years, the smart phone and other downstream products will keep growing, meanwhile the on-board electronics, networking, industrial control and other terminal markets will also experience a period of rapid development, the demand for chips will continue to grow and provide the IC design companies with great development opportunities.


Figure 2.   The IC design industry growth rate is higher than the IC industry.
In recent years, the importance of IC design industry has been rising and it accounted for 36.71% of the whole integrated circuit industry in 2016.


Figure 3.   IC design takes more proportion of IC industry during 2009 ‒ 2017.
2.   China's IC Design Industry Distribution
After years of innovation and development, the domestic IC design industry has exhibited a significant gathering trend. By the end of 2015, the industrial scale in Pearl River Delta, Yangtze River Delta, Beijing and Tianjin Bohai Sea, and the central and western regions have reached 43.992 billion yuan, 42.584 billion yuan, 29.521 billion yuan and 7.319 billion yuan, in total accounting for 30.65% of the total national design industry, and the growth rate reached 46.07%, 7.90%, 31.37% and 18.16% respectively.
Table 1.   2015 National IC design industry development statistics
Regions and cities2014proportion2015proportion
Yangtze River DeltaShanghai241.5024.58%278.2322.54%
Hangzhou35.843.65%36.822.98%
Wuxi60.006.11%43.613.94%
Suzhou22.012.24%25.802.09%
Nanjing35.303.59%35.002.84%
Hefei0.00%1.380.11%
Sub-total394.6540.17%425.8434.50%
Pearl River DeltaShenzhen243.5024.78%380.0030.79%
Zhuhai19.211.96%17.801.44%
Hong Kong9.160.93%9.230.75%
Fuzhou15.301.56%14.891.21%
Xiamen14.001.42%18.001.46%
Sub-total301.1730.65%439.9235.65%
Circum-Bohai-SeaBeijing170.2017.32%272.0022.04%
Tianjin39.454.02%11.980.97%
Dalian8.020.82%6.120.50%
Jinan7.050.72%5.110.41%
Sub-total224.7222.87%295.2123.92%
Midwest areaChengdu31.233.18%31.002.51%
Xian22.502.29%28.602.32%
Chongxing, Mianyang8.210.84%9.450.77%
Changsha-0.00%4.140.34%
Sub-total61.946.30%73.195.93%
Total982.48100%1,234.16100%
By comparing the Chinese IC design enterprise distribution in 2015 and 2016, among the eight essential areas including the communication, smart card, computer, multimedia, navigation, simulation, power and consumer electronics, etc., the number of computer chip design enterprises increased from 51 to 107, the revenue increased by 27.23% from 8.845 to 11.253 billion yuan; the number of multimedia chip design companies shrunk however the total revenue increased dramatically mainly benefiting from Omni Vision’s settling down in this country; the consumer chips market also expanded from 14.425 billion yuan to 31.152 billion yuan, a jump of over 100%.
Table 2.   Distribution of Chinese IC design companies. (Unit: 100 million RMB)
No.domain20152016
companyproportiontotal salescompanyproportiontotal sales
1Communication15721.33%597.7624117.67%688.40
2Smart Card395.30%95.64695.05%131.67
3Computer516.93%88.451077.89%112.53
4Multimedia9312.64%84.29433.15%176.69
5GPS334.48%17.58171.26%2.92
6Simulation16422.28%120.7621916%64.74
7Power8611.68%85.44775.68%30.05
8Consumption11315.35%144.2558943.22%311.52
Total736100%1,234.171,362100%1,518.52
3.   China's IC Design Industry International Competitiveness
China's IC design industry has experienced rapid expansion not only in the domestic market but also in the global mainstream competitive landscape. In 2014 HiSilicon, UNIS and Datang entered the world's top 25 IC design company list, in 2015 China took nine seats in the top 50 fabless companies, and in 2016 this number rose to 11 as shown in Figure 4. Comparing to the year 2009 in which only HiSilicon was in the top list, China's IC design industry has largely grown.


Figure 4.  
In 2017 the domestic IC design industry revenue has reached 207.35 billion yuan, an annual increase of 26.1%. Among China’s top ten IC design companies, Huawei's HiSilicon ranked the first for its 36.1 billion yuan revenue, Spreadtrum ranked second with 11 billion yuan and ZTE ranked third with 7.6 billion yuan. The threshold level for the top ten domestic IC design company revenue list is 2.05 billion yuan.
Table 3.   2017 China's IC design industry's top ten company ranking.
RankingCompany NameSales (million RMB)
1HiSilicon361
2UNIS Spreadtrum110
3ZTE Microelectronics76
4Huada Semiconductor52.1
5IPCore Microelectronics44.9
6Goodix38.9
7Hangzhou Silan31.8
8Focaltech28
9Galaxycore25.2
10Vimicro20.5
Currently the mainstream of China domestic design industry employs the 90nm ‒ 28nm node technology while some has begun using the advanced 16/14nm process. Shanghai is among the leading domestic IC design industry regions. In 2017 Shanghai’s mainstream IC design industry was at 90nm ‒ 65nm ‒ 40nm level with some has reached 16/14nm level, meanwhile the 10nm design technology was under development. China's IC design enterprises have promoted into the world's first camp, and their international competitiveness has improved significantly.
There are many segments of the integrated circuit industry. In details, application-specific integrated circuit has increased largely and mainly attributes to the consumer electronics, such as mobile phone chips, chip set-top boxes, security cameras chips. Except for a handful of specific areas occupying the high end market, for example, Huawei HiSilicon 400G core router autonomous chip was launched ahead of its competitor Cisco in 2013, and HiSilicon high-end mobile phone application processor chip lead the application of advanced 10nm node process, others are mostly focused at the low-end level. Spreadtrum’s 2016 chip delivery accounted for 42% of the world's low-end market, accounting for 37% of global revenue and entered the top three smartphone chip manufacturers, and exhibited significant advantage in the low-end smart phone chip market. In eight areas of communication, smart card, computer, multimedia, navigation, simulation, power and consumer electronics, the communications chip design accounted for 50% of the market volume due its large growth and huge market capacity, while other areas of the industry are relatively small.
Regarding to the high-end general-purpose chip design, there is still big gap between China and overseas, and China is still highly dependent on external supplies. Among China's IC imports of more than 200 billion US dollars a year, the two types of high-end general-purpose processors and memory chips together accounted for more than 70%. Loongson has developed fast in recent years, however it was only limited in the military applications, and was still far from the civilian use. Three major memory projects have just launched, and regarding to the FPGA and other high-end general-purpose chips, domestic supply remains blank.
4.   China's Top Ten IC Design Companies
4.1.   HiSilicon
HiSilicon Technologies Co., Ltd. was established in October 2004, its predecessor Huawei IC Design Center was founded in 1991. It is headquartered in Shenzhen, with design offices located in Beijing, Shanghai, Silicon Valley and Sweden. HiSilicon products cover wireless networks, fixed networks, digital media and other areas of chip solutions, which have successfully been applied in more than 100 countries and regions. In the digital media field, it provides chips and solutions for network monitoring, video phone, DVB and IPTV. For video applications, HiSilicon launched the world-leading intelligent IP cameras, smart set-top boxes and smart TV chips and end-to-end solutions including the provision of image acquisition, decode and display full 4K. Regarding to the IoT, HiSilicon introduced PLC/G.hn/802.
After twenty years’ development, HiSilicon has produced more than 200 kinds of chips, and applied for more than five thousand patents. Particularly their Kirin series chips have been at the forefront of the world which is a remarkable achievement of China's IC industry.
Although HiSilicon takes a large share of China's mobile phone chip market, there is still big gap comparing to Qualcomm, Apple and other world's leading mobile phone chip companies. According to Strategy Analytics’ research service report on handset component technologies, Qualcomm, Apple, MediaTek, HiSilicon and Samsung LSI are the top five in 2017 global smart phone application processor (AP) market. Its data indicates that in 2017 Qualcomm took 42% revenue share, followed by Apple 22% and MediaTek 15%, and HiSilicon 8%.


Figure 5.   2017 annual revenue of global smartphone processor market.
4.2.   UNIS Spreadtrum
Spreadtrum was founded and headquartered in Shanghai in April 2001, and have established R&D centers in Shanghai, Beijing, Tianjin, Suzhou, Hangzhou, Chengdu, Xiamen, San Diego, San Jose and Finland. It also has technical support center in Shenzhen and international support offices in Taiwan, India, and Mexico. Spreadtrum’s products support multiple broadband wireless communication standards including GSM, GPRS, EDGE, TD-SCDMA, W-CDMA, HSPA +, and TD-LTE.
Unisplendour Group acquired the Spreadtrum Communications in 2013, the RDA in 2014, and integrated them to be UNIS Spreadtrum in 2016. After the integration the Spreadtrum was dedicated to independent research on 2G/3G/4G mobile communication baseband chips, RF chips, IoT chips, TV chips, imaging sensor chips. Its product line covers mobile phones, tablets, networks, smart wearables, navigations, imaging devices, and digital televisions.
Spreadtrum is rooted in China and aims at the global market. It has established good cooperation with domestic and foreign leading manufacturing and design companies including Samsung, HTC, Huawei, Lenovo, TCL and other 1,300 counterparts. In 2015 Spreadtrum shipped 700 million chips, its cell phone baseband chip took the third largest share in the world, and was ranked the world's top ten IC design companies. In 2014 Spreadtrum and the global chip giant Intel became strategic alliance to jointly launch the mobile device development based on the Intel architecture. The preliminary result of cooperation ‒ the first x86 architecture based system chip was launched to the market in 2016. In 2015 the National Integrated Circuit Industry Investment Fund and Unisplendour Group reached a strategic investment agreement of ten billion yuan for improving the core competitiveness of the integrated circuits industry. In 2016 Spreadtrum achieved the authorization of the ARM V8 architecture processors for mobile phones in order to carry out the development of domestic self-control architecture CPUs.
4.3.   ZTE Microelectronics
ZTE Microelectronics Technology Co., Ltd. (hereinafter referred to as "ZTE Microelectronics") was registered in 2003. ZTE Microelectronics is dedicated to becoming the world's leading integrated chip supplier bases on its communication technologies. ZTE Microelectronics owns the world-class IC design and verification technology, advanced EDA design platform, COT design services, development process and standards, and successfully produced over 100 commercial chips covering communications networks, personal applications, intelligent "cloud" applications, everywhere over the country.
ZTE Microelectronics has nearly 20 years of research and development history of IC products. Baseband and intermediate frequency chip wireless core solutions are the major development directions of this company. Regarding to the wireless terminal chips, ZTE Microelectronics launched the NB-IoT pre-commercial chips in 2016, and has completed the laboratory testing and field testing with a number of operators, road test terminals based on these chips are being adopted by a number of native and overseas operators to their NB-IoT network constructions. For the wired chip systems, ZTE Microelectronics’ ONU terminal chip sales firmly remain global top three. In 2016, its industry's first full-mold 10G PON chip was released and rapidly gained the gigabit market, and then it continuously launched the mobile telecommunication and intelligent gateway related chip solutions, these products have achieve good results and reputation through the operator tests. In addition, ZTE’s self-developed 80G OLT processor, 500G packet switching chips, 100G network processor chips have achieved commercial success. In the multimedia chip field, ZTE Microelectronics captured the 4K ultra HD conversion opportunity and launched a series of full 4K multimedia chips to complete the set-top box industry layout, the video quality and power performance reached the industry-leading level. ZTE also introduced the PON + IPTV integration program and became one of the few manufacturers which may independently provide mature and stable integrated media gateway solutions.
4.4.   Huada Semiconductor
Huada Semiconductor Co., Ltd. is the subsidiary of the China Electronics Corporation (CEC). It has three subsidiaries, Shanghai Belling, Hongkong Solomon Systech as well as CLP Holdings, with a total asset of over 10 billion yuan. Huawa was founded in May 2014 in Shanghai, and specializes in the design of integrated circuits and related solutions.
Huada Semiconductor’s product category includes: industrial control MCU, power and driver chips, smart cards and security chips, power management chips and novel graphics chips. In recent years Huada Semiconductor experienced rapid growth in the industrial control MCU market. It ranked ninth in the MUC global semiconductor market, and took a share of 1%, however there is still a big gap between Huada and the international giants in the field such as Renesas and NXP.


Figure 6.   2015 MCU market revenue ranking.
4.5.   IPCore Microelectronics
Beijing IPCore Microelectronics Technology Co., Ltd. is a subsidiary of the State Grid Information & Communications Industry Group. It was founded in January 2010 and headquartered in Changping UHV base. Its business covers the field of power, information and communication, energy conservation and environment protection, finance, municipal and modern services, among which the key three areas are sensor chips, communication controls and power distributions. At present, the company's assets exceed 2 billion yuan and operating revenue is around 4 billion yuan, making it the only Chinese power industry company that is engaged in the development, production and experimental verification of chips.
4.6.   Goodix Technology
Goodix Technology was established in 2002 as a global leader of the human-computer interaction and biometric technology, and has established a leading position in the field of smart mobile devices including mobile phones, tablets and wearable products, etc. It launched the world's leading single-layer multi-touch chip and the world's first touch screen near-field communication technology Goodix LinkTM, the world's first fingerprint pressure identification chip applied on the front of the Android phones, the world's first invisible fingerprint sensor (IFSTM), the world's first fingerprint identification chip supporting the glass cover, the world's first live fingerprint detection chip Live Finger DetectionTM on a mobile terminal, the world's first screen under optical fingerprint recognition technology (IN-DISPLAY FINGERPRINT SENSORTM), etc.
Goodix Technology has become one of the top manufacturers for the Android fingerprint recognition mobile phone chip with the largest market share, second to AuthenTec which is Apple’s supplier of fingerprint identification technologies. In 2017 Goodix Technology took 35% share of the Android fingerprint identification chip market, and this number is expected to reach 50% in 2019.
4.7.   Silan Microelectronics
Silan Microelectronics is headquartered in Hangzhou Hi-tech Industry Development Zone dedicated to integrated circuits and microelectronic product design and production. Its production line includes power drivers, semiconductor devices and modules, MCU, audio and video SOC, MEMS sensors and LED chips, among which the LED driver chip brings its main business income, and it has been dominating the LED lighting market.
4.8.   Focaltech
Focaltech is a global leader in the industry of multi-finger capacitive touch screen technologies, is among the best global providers of capacitive touch-screen chip provider. It can support 1 inch ‒ 25 inch various structure, process and material capacitive screens in order to provide global users with complete capacitive touch-screen solutions. Focaltech is dedicated to independent development and holds over 600 patents. In addition to the support of traditional touch module, it also aims at high end applications in the in-cell and on-cell field, and developed advanced manufacturable solutions to meet the needs for lightweight touch screens.
4.9.   Galaxycore
Galaxycore Microelectronics (Shanghai) Co., Ltd. was founded in 2003 as China's leading image sensor chip design company targeted the global mobile device and consumer electronics market. Its product line includes imaging sensor chips mainly used for phones, tablets and other mobile terminals, as well as LCD driver chips.
4.10.   Vimicro
In 1999, a few entrepreneurs came back to China from Silicon Valley and founded the Vimicro in Beijing Zhongguancun Science Park under solid support from the state and local government. It undertook the national strategic "Starlight China Chip Project" and was dedicated to the development of the digital multimedia chip design and industrialization.
During the last two decades, the "Starlight" digital multimedia chip products have been successfully released to the global market, and were widely used for the high-growth multimedia applications on PCs, broadband internets, mobile communications and information home appliances. Its products have reached over 16 countries and regions including Europe, America, Japan, Korea, etc., with clients including Sony, Samsung, HP, Philips, Fujitsu, Logitech, Huawei, Lenovo and many other well-known domestic and foreign enterprises. Vimicro occupies more than 60% share of the global computer image input chip market.
Acknowledgments
We would like to extend appreciation to the graduate students: Weichen Liu, Tianyang Gai, Cheng Guo, Pengzheng Gao from the Institute of Microelectronics of Chinese Academy of Sciences (IMECAS) and Lei Qu from North China University of Technology for their contribution of contents.
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Published: Sept. 30, 2018 (Versions2
References
Journal of Microelectronic Manufacturing