More work needed to catch global giants: experts
China's integrated circuit (IC) industry has seen rapid growth in the past five years in terms of technological advancement and the rising number of companies in the sector, thanks to the government's strong support as well as an increase in international cooperation, experts said on Tuesday.
Chinese companies are narrowing the technology gap with their foreign counterparts in producing highly complex semiconductors and have been expanding fast in overseas markets, they noted.
The number of IC design companies in China almost doubled in 2016 to 1,300, Liu Kun, vice general manager of the IC Industry Research Center at CCID Consulting, told the Global Times on Tuesday.
Domestic companies such as Shanghai-listed Hangzhou Silan Integrated Circuit Co, a leading integrated device manufacturer (IDM) in China, are making progress in IC production.
Silan has been accelerating the development of an 8-inch chip production line, which is expected to produce 15,000 chips a month at the end of this year and 40,000 units each month at the end of 2018, according to a statement the company sent to the Global Times on Tuesday.
"With the establishment of the new production line, our company's gap with global IDMs in terms of equipment will be gradually narrowed," said Chen Yue, board secretary of the firm.
China has made breakthroughs in areas such as artificial intelligence (AI) chips and power supply chips.
For example, on September 2, Huawei launched the Kirin 970 AI chip, which can perform the same AI computing tasks faster and use far less power.
This technology has reached the international level, Wang Yanhui, head of the Shanghai-based Mobile China Alliance, told the Global Times on Tuesday.
Meanwhile, domestic semiconductor companies have been entering overseas markets with a slew of mergers and acquisitions.
Beijing Jianguang Asset Management Co bought the Standard Products business of NXP Semiconductors for approximately $2.75 billion in February this year, the largest deal ever initiated by Chinese capital in the semiconductor industry.
In addition, China has become increasingly attractive over the years to foreign companies and Chinese talent overseas.
For example, South Korean technology giant Samsung Electronics Co announced in August a $7 billion investment in Northwest China's Shaanxi Province to enlarge output.
"With the fast development of the sector and optimization of the domestic business environment, many Chinese people working in the IC industry overseas have started to return to China and set up businesses," Liu said.
Strong support
The growth of China's domestic IC industry has been boosted by strong policy support from the government.
In June 2014, the State Council, China's cabinet, issued the Integrated Circuit Industry Development Promotion Guidelines. The China Integrated Circuit Industry Investment Fund was established in September the same year, according to Liu.
The guidelines focused on efforts to accelerate the development of the IC industry and make breakthroughs in key IC equipment and materials as well as in design and testing.
The fund, whose first-phase investment scale was 120 billion yuan, drove domestic IC companies' development, as well as supporting their global expansion, Liu said.
China has also issued other policies to boost the industry, including improved market conditions and lowered burdens on high-tech firms.
Despite efforts to improve the country's IC industry, domestic industrial supply still cannot fully meet the needs, said Chen from Silan.
"The European, US and Japanese companies' dominance of IC technologies and equipment curbs the development of the domestic high-end IC industry, resulting in our country's heavy reliance on imported chips," he said.
Data from the General Administration of Customs showed that China's imports of IC products reached 1.5 trillion yuan in 2016, ranking No.1 among all the items imported last year.
"By taking advantage of China's vast electronics market, the government and industry associations should continue to boost cooperation between IC firms and downstream electronic terminal corporations. Related sectors such as IC materials and equipment should also be improved," Liu said.
Since IC is a technology-intensive industry, where capital is not enough to make technological breakthroughs, domestic companies should attract talent and optimize their management to catch up with the leading global semiconductor companies, Wang said.
