With the help of Tsinghua Unigroup and SMIC, who will dominate the semiconductor industry in the north?

Latest update time：2015-06-12

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The development of the country's integrated circuit industry is supported not only by policies from local and central governments, but also by capital investment from large integrated circuit industry funds and the participation of domestic capital. Local governments are actively laying out the local semiconductor industry chain. Who will be the IC capital of Shanghai or Beijing?

In the article " Who can become China's IC capital in the integrated circuit boom ?", Hefei and Xiamen, which have recently stepped up their efforts to develop the semiconductor industry, are introduced. As emerging forces, they are coming with great momentum, but it is not realistic for them to become China's IC capital at present. Because before them, Beijing and Shanghai, with their earlier start and the leadership of leading enterprises, are more powerful in competing for the IC capital.

First, let's talk about the earlier government policy support for the integrated circuit industry in Shanghai and Beijing. Founded in July 1992 , Zhangjiang High-Tech Park, also known as the "Shanghai Silicon Valley", is one of the four key development areas of Shanghai Pudong New Area, along with Lujiazui, Jinqiao and Sunqiao. In August 1999 , the Shanghai Municipal Government announced the "Focus on Zhangjiang" strategy, specifying that the park will focus on IC , software, low-carbon new energy and biomedicine as the main industries. On March 1 , 2015 , Zhangjiang High-Tech Park was officially included in the scope of Shanghai Free Trade Zone. Zhangjiang High-Tech Park is planned into seven major areas. Currently, there are more than 200 IC industry-related companies in the park , including SMIC , Shanghai Huahong, ZTE, National Instruments ( NI ), AMD , Freescale and Marvell .

The IC industry chain of Zhangjiang Hi-Tech Park has covered design, manufacturing, packaging and testing, equipment materials and technical services. Seven of the top ten IC design companies in Shanghai are located in Zhangjiang Hi-Tech Park. The combined revenue of these seven IC design companies is RMB 12.6 billion, accounting for 52% of Shanghai's total IC design revenue .

In order to promote the new development of Beijing's software industry and integrated circuit industry, accelerate the cultivation of strategic emerging industries, further play the supporting role and pillar role of the software industry in the capital's economic and social development, and enhance the strategic basic role of the integrated circuit industry, the Beijing Municipal Government formulated and issued "Several Policies of Beijing to Further Promote the Development of Software Industry and Integrated Circuit Industry" on February 8 , 2014. In order to promote the agglomeration and development of the integrated circuit industry, a national integrated circuit design industry base will be built in Zhongguancun Science City, and a national integrated circuit industry park will be built in the southern high-tech manufacturing industry and strategic emerging industry development belt to provide new space for the agglomeration and development of integrated circuit design, manufacturing, packaging and testing, equipment materials and complete terminal production.

In view of the development of the integrated circuit industry in Zhongguancun, the Zhongguancun Management Committee and Haidian District jointly issued two policy documents, "Several Measures on Promoting the Development of Zhongguancun Integrated Circuit Design Industry" and "Several Financial Measures on Supporting the Development of Zhongguancun Integrated Circuit Industry", which intend to address the key bottlenecks that currently restrict industrial development and support the development of enterprises from multiple aspects, such as improving the innovation capabilities of enterprises, attracting and cultivating talents, increasing financial support, promoting upstream and downstream cooperation, optimizing customs clearance procedures, and strengthening spatial agglomeration. In Zhongguancun, especially in the core area of Zhongguancun, a number of excellent integrated circuit design companies, industry alliances, incubators, etc., such as Unigroup Spreadtrum, Ingenic, Tongfang Microelectronics, Datang Semiconductor, GigaDevice, NARI Intelligent Core, Chiptronix, IC Coffee, etc. have gathered, and an industrial cluster has been initially formed.

Through the support of government policies in Shanghai and Beijing, we can see that in the development of the integrated circuit field, the two cities started earlier than Hefei and Xiamen, and their integrated circuit industry layout is more complete. The entry of a large number of well-known companies has also enhanced the integrated circuit industry strength of the two cities. So, what role will the leading companies in the two cities play in the competition for China's IC capital ?

As the largest foundry in China, SMIC is also the leader in domestic foundry. Although SMIC has built factories in Wuhan, Beijing and Shenzhen, its headquarters is located in Shanghai, so it can naturally play a leading role in Shanghai's integrated circuit industry. SMIC successfully manufactured Qualcomm 's Snapdragon 410 processor using 28- nanometer technology . SMIC CEO Qiu Ciyun said in a forum held in Pudong that SMIC's 28- nanometer process technology will be mass-produced in the first half of 2015 , and 4G chips will be able to be produced in the mainland in the future. In addition, Leadcore Technology is headquartered in Jinqiao, Pudong, Shanghai. It is an IC design company of Datang Telecom Technology Industry Group. In the 3G era, Leadcore Technology chips were used by Coolpad, ZTE, Lenovo, Huawei, Tianyu, Tianmai and many other models. Recently, Xiaomi chose to cooperate with Leadcore Technology, which also made it possible for Leadcore Technology to regain the glory of the 3G era.

Tsinghua Unigroup has taken many actions under the influence of the spring breeze of the integrated circuit industry. It has integrated Spreadtrum and RDA Microelectronics, aiming to build the number one domestic IC design company. After the acquisition, Tsinghua Unigroup has become the world's third largest mobile phone chip company and the world's tenth largest integrated circuit company. Zhongguancun Integrated Circuit Design Industrial Park was launched on January 30 in Zhizhen Building of Beihang University Science and Technology Park. Tsinghua Unigroup's new chip design headquarters in Beijing has settled in the industrial park. According to data from 2014 , Spreadtrum Communications shipped 450 million chips, of which nearly 200 million were smartphone chips, and RDA Microelectronics shipped 100 million chips. After acquiring these two companies, Tsinghua Unigroup's total chip business shipments reached 550 million, ranking third in the world's mobile phone chip market.

Samsung Electronics decided to invest in the Beijing Semiconductor Fund at the end of May to invest in semiconductor companies in the Beijing Economic and Technological Development Area ( BDA ). Samsung will work with the mainland government to discover and help powerful IC design start-ups improve their technological competitiveness. In early June, Beijing Jianguang Asset Management Co., Ltd. announced that it plans to acquire RFPower , the RF power division of NXP Semiconductors, for US$ 1.8 billion . From the perspective of the domestic semiconductor industry layout, the high-power field that RFPower excels in has always been lacking in China.

For the representative enterprises in the integrated circuit industry in Shanghai and Beijing, Shanghai has SMIC, a foundry company, and Beijing has Tsinghua Unigroup, which is strong through integrated IC design. So, driven by policies and superior enterprises, which of the two places will dominate China's semiconductor industry?

IC design is the locomotive of the development of the integrated circuit industry, driving the growth of wafer manufacturing, packaging and testing, equipment, and materials. However, Tsinghua Unigroup and SMIC, as representative enterprises in the two places, both have companies in Beijing and Shanghai. Therefore, it is difficult to say who will have an absolute advantage and dominate the domestic semiconductor industry. However, in the development and layout of the industry, Tsinghua Unigroup's acquisition of Spreadtrum may make Shanghai lack advantageous IC design companies, but Shanghai companies will also enhance their IC design capabilities through new cooperation and acquisitions .

Ultimately, Shanghai and Beijing are equally strong, and coupled with Huawei's already very powerful HiSilicon, the domestic integrated circuit industry can form a situation where the competitive advantages of the three regions and three powers complement each other.

Source : OFweek Electronic Engineering Network

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