IC Design Industry: Across Billions of U.S. Dollars

According to the latest statistics from China Semiconductor Industry Association's Design Subcommittee, China's IC design industry is expected to exceed US$10 billion for the first time this year, and the industry’s total sales will reach 68.681 billion yuan, an increase of 25.08% over 2010, accounting for the proportion of IC design industry worldwide. From 11.85% in 2010 to 13.89%. The position of integrated circuit design industry in the Chinese mainland has been further consolidated in the global industry, ranking third in the United States and China Taiwan.

Decline in the number of quality rises While IC design companies in mainland China have achieved a leap in their overall strength, the sales of the top ranked design companies have exceeded US$1 billion for the first time, reaching 6.669 billion yuan. According to the ranking of global design companies in 2010, they can enter the top 15 Bit. In addition, the entry threshold for the top 10 design companies this year has exceeded 1 billion yuan, the average growth rate of the top 10 companies reached 35.5%, and the total sales of these 10 companies reached 21.815 billion yuan, an increase of 5.715 billion yuan over last year, accounting for The total sales of the industry was 31.76%, an increase of 2.08% from last year. At the same time, new changes have occurred in the ranking. Compared with last year, there are 4 new entrants.

It is worth noting that the number of integrated circuit design companies in mainland China has declined for the first time. There are 534 integrated circuit design companies in Mainland China (including IC design institutes and chip design departments in the unit). The number is reduced by 48. In the past year, dozens of design companies have participated in integration or integration, and the long-awaited consolidation and reorganization has kicked off.

Wei Shaojun, director of the China Semiconductor Industry Association's design branch, said that the improvement of business quality and product quality is one of the characteristics of the development of the design industry this year. In 2011, it is estimated that the sales of 99 companies will exceed 100 million yuan. The number of these enterprises accounts for 18.57% of the total, but sales account for 65.86% of the industry's total revenue, totaling 45.233 billion yuan.

In terms of product quality, the number of companies engaged in R&D and sales of communications, computers, and multimedia chips reached 186, accounting for 34.83% of the total number of design companies. In the field of network communications, mobile smart terminals and multimedia chips, China's design companies have made significant progress, and some products have been adopted by large international companies, forming a relatively strong competitive advantage.

The average gross profit margin is not large Although China's design industry has maintained a momentum of rapid growth, the overall scale is still small. The sales of the top ten newly-designed companies ranked first, still unable to enter the top 10 in the world. The industry's sales are still less than the sum of sales of the world's top two design companies. The average gross profit margin is not the biggest weakness of the industry development. According to a sample survey of 105 large design companies, the average gross profit rate of these companies is 27.61%, and the average gross profit margin of the top 10 design companies is 31.3%, which is internationally recognized. The average gross margin level of the industry is 40%.

Huang Qihong, director of Asia Pacific at Tensilica, believes that China's semiconductor design industry needs to change its concepts. Whoever comes to the market first has the right to speak. Apple is a typical case, it broke the 70/30 rule, the entire product life cycle is making money. The most important thing is that it first came to the market. Last year, the smart phone shipment rate has fallen below 50%, but Apple's profits are more than other homes. Magma Wang, general manager of Magma China, also said that most of the local design companies are doing the following products. As a result, they can only participate in market competition through prices, thus sacrificing profits. It is necessary to strengthen the consciousness of independent innovation, develop something different from others, and lead the trend of product development.

In addition, apart from major breakthroughs in the field of communications in the Chinese IC design industry, there are not many achievements in the field of large-scale strategic products such as microprocessors, memory, programmable logic arrays, and digital signal processors. Ren Qiwei, general manager of Xi’an Huaxin, told the “China Electronics News” reporter that the Chinese market accounts for 30% to 40% of the global memory market, but almost all rely on imports. Huaxin memory turnover has reached 100 million US dollars, but China imports 40 billion yuan. The memory industry needs a national strategy. It is difficult for the company's strategy alone to promote the development of the industry.

The fact that Chinese design companies rely on or even abuse IP cores is getting worse. Some of the companies that were once in the top 10 have fallen out of the ranks, and some companies have not appeared in the top 10 for two or three consecutive years. To this question, Wu Xiongang, president of ARM China, believes that the core issue of IP cores is whether or not to accumulate core technology and competitiveness when making chips. If a company only depends on the strength of a third party and does not have its own core technology, then when it does the next product, its competitiveness will be weaker. After three to five years, it is critical that one's own IP accumulation and technology accumulation can reach new heights.

Wei Shaojun pointed out that some companies in the IC design industry have a mentality of being happy, become "vegetarian" or suffering from "dwarfism"; some companies are keen to apply for various national and local scientific and technological projects and become "project companies"; some are keen to engage in Inventions and innovations ignore the economic attributes of innovation.

Entrepreneurs need courage and courage, sometimes not betting unsuccessful. Huang Xiaoli, senior vice president of global operations at Cadence, said that there are always some crazy entrepreneurs who dare to fight with the giants. For example, although the 28nm threshold is high, new companies will enter. As long as the idea is good, capital raising is not a problem. At the same time, technology must continue to be invested, otherwise product functionality will be limited, eventually leading to IP cores. Chairman of the board of directors and president Dai Weimin believes that entrepreneur Win-win's mentality is very important. If you are jealous, it's worse for others to make money. Don't think that you can make your own profits. Then you do everything. You have to know how to grab the bulk.

Seeking for differentiated competition Although national science and technology plans such as "Nuclear High Base" have given greater support in these product areas, they have not yet reached mass production in these areas, let alone participate in market competition. Although important advances have been made in supercomputers with high-performance multi-core CPUs, dynamic random access memories, embedded CPUs, etc., there is still a small gap compared to the international advanced level. If the decisive breakthrough cannot be achieved in the high-end general-purpose chip field, the development space of China's IC design industry will be greatly limited.

For the Chinese IC design industry, only by continuous innovation can we gain greater living space. How to innovate, Wei Shaojun said that innovation is not a technical concept but an economic concept. It is necessary to distinguish innovation from invention. Only when the invention is actually applied and it is economically effective it becomes innovation. In the era of mobile Internet, application innovation, business model innovation and technological innovation have become the most important driving force. At the same time, Wei Shaojun also pointed out that advanced technology does not equal advanced levels. In the past 10 years, China's design companies are relying more on process and EDA tools to achieve the progress of their products. The technology nodes used are far ahead of the performance requirements of the developed chips.

How to enhance the competitiveness of products, Ju Long, president of Creative Electronics China, believes that cost control, low-power design and product differentiation are the key considerations for product developers. These design, technology and production elements must be brought to consumers. Kind of value and "value added" feelings. Joseph Sawicki, vice president of Mentor Graphics, also emphasized that he has its own characteristics and advantages in promoting the development of local IC companies in China through product differentiation services.

The semiconductor industry is very cyclical, and companies need to be differentiated. The practices at each stage are different. Pan Jianyue, global vice president of Synopsys Technology, said that when the product is in the rising period, it needs to be better than others in quality and function; after the quantity enters mature stage, it needs to be delivered faster and the channel is faster; when the product is in decline When selling products as quickly as possible, products are cheaper and competitive.

Chuang Yuanqi, deputy general manager of sales of CSMC, said that it should strengthen its understanding of emerging applications and increase the corresponding IC design level. The design capability of analog ICs in China is not worse than that of foreign countries. The design link must combine the application requirements with the system integration design capabilities in order to have product cost and functional competitiveness.

Luo Zhenqiu, deputy general manager of business development at TSMC China, told the "China Electronics News" reporter that companies need to develop a set of excellent skills. TSMC's "Decision of the Dragon" is the three aspects of technology, efficiency and service. Although it looks simple, in practice it takes a lot of effort.

At this stage, Europe and the United States are pessimistic about the global IC situation. For the development of China's IC industry next year, most of the industry's attitude is not pessimistic. Zhang Jinguo, director of the special office of the High Technology Center of the Ministry of Science and Technology, said at the design annual meeting that the Chinese IC design industry has experienced the international financial crisis in 2008. Although it is now cold, it can stand the test.