China Semiconductor Industry Report, 2014-2015
The report covers the followings:
1. Global Semiconductor Market and Industry;
2. China Semiconductor Market and Industry;
3. Eleven Chinese IC Design Companies
4. Five Chinese Foundries
5. Four Chinese Packaging and Testing Companies
According to China Semiconductor Industry Association, the total value of the entire semiconductor industry chain exceeded RMB300 billion in 2014, of which only RMB104.7 billion or one-third was concerned with products (excluding foreign companies). The IC export volume is still optimistic in a relative sense, but it is mostly contributed by foreign companies in China, rather than local enterprises.
Without foreign companies, Taiwanese enterprises and software business, Chinese semiconductor industryturns to be a real pattern like this: the output value of China semiconductor industry approximated USD12.5 billion in 2014, of which USD5 billion came from IC design, USD3.7 billion from IC fabrication, USD3.8 billion from IC packaging and testing. Apparently, IC design accounted for a higher proportion, in fact, the foundries of IC design companies mainly referred to Taiwanese TSMC or UMC, especially large IC design companies; about 80% of wafers were produced by Taiwanese TSMC. This means the irrelevance between IC design companies and foundries in Mainland China.
Since 2014, Chinese financial institutions or enterprises which are adept at capital operation and have huge capitalhave acquired semiconductor companies worldwide vigorously. China is trying to expand its semiconductor industry rapidly through acquisitions. However, the semiconductor industry requires long-term accumulation of talents and technologies, the semiconductor industry of China still has a long way to go even if it renders capital operation.
Chinese government makes great efforts to support the memory sector of the semiconductor industry with the investment of at least USD10 billion, because China is the largest memory market and buys 75% of the global memory. If the global memory industry structure remains stable, China will import tens of billions in USD of memory each year.
Most of Chinese IC design companies rely on their powerful parent companies which are partly state-owned enterprises with dominating positions and non-market-oriented operation to thrive and almost no independent IC design companies exist. For example, the parent company of Nari Smart-chip Microelectronics is a subsidiary of State Grid with main products -- smart meter IC and a monopoly position. The parent company of CEC Huada is China Electronics Corporation (CEC) which monopolizes the ID card-use IC market. Non-state-owned large enterprises Huawei, ZTE, Datang Telecom (with TD-SCDMA technology) and SMIC Microelectronics act as the backers of Hisilicon, ZXIC, Leadcore Technology and Galaxycore respectively.
Independent IC design companies include Spreadtrum, RDA, Rockchip and Allwinner Technology. Spreadtrum and RDA which need a lot of money but hold limited financing channels have been acquired by state-owned enterprises. Major shareholders and technology sources of Goodix and FocalTech are actually Taiwanese companies.
In Mainland China, IC design companies are highly dependent on mobile phone and tablet PC markets. Some companies are even completely dependent on the smart card market, such as Nari Smart-chip Microelectronics, Fudan Microelectronics and Hua Hong Integrated Circuit.
Taiwanese IC design companies which are mostly independent firms are superior in technology to their counterparts in Mainland China; even if some Taiwanese companies relied on the parent companies at early stages, they have become dependent slowly, such as Himax and Novatek. Taiwanese IC design companies largely rely on the upstream industry chain instead of the downstream. Five of Taiwan's top 18 IC design companies focus on LCD driver because Taiwan's LCD panel industry ranks first in the world by shipment. In Chinese Mainland, IC design companies specialize in the digital field except RDA; in contrast, there are many Analog and Mixed IC design companies as well as two high-tech ASIC design companies of a certain scale in Taiwan.
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