2014 Survey and Analysis of Chinese IC Design Companies

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‘中国IC设计公司调查’凭藉着坚持每年持续地进行，如今已经得到众多中国IC设计公司的认可和大力支持。2014年是中国版《电子工程专辑》第十三次设计调查问卷，透过电子邮件、线上问卷和电话调查，邀请中国IC设计公司参与分享中国IC产业的发展现状。这次活动共收到160位参与者的回覆，经过严格筛选后(必须是中国公司、公司主要经营业务是IC、资料必须合理可靠，以及同一家公司仅一位受访者参与等条件)，保留了其中的98份作为统计样本。

This year's survey results are roughly similar to those of previous years. 75% of all respondents are from companies wholly invested by China, and more than 75% of all respondents are engaged in design development or engineering management. Therefore, their responses can also more accurately reflect the development status and changes of China's IC industry in terms of application areas, EDA&IP use and foundry, and design capabilities.

After obtaining the statistical results of the three-month survey, this article shares some interesting findings compared with last year's data.

Mobile phones/smart cards support half of China's IC industry

According to the survey data, 20% of the companies have entered the "Billion Dollar Club" of Chinese IC design companies. Among the companies with revenues exceeding 100 million US dollars in these years, about 40% of them are mainly engaged in the mobile phone field (including baseband, radio frequency, touch, and camera), and about 25% are related to smart cards/RFID. Other fields include TV/tablet/set-top box processors, power IC manufacturers, and high-speed interface ICs (of course, some products of manufacturers in other fields are also involved in mobile phone applications). Chinese IC manufacturers closely surrounding the billion dollar club are basically included in the above fields.

Figure 1: Respondents’ company revenue status.

Compared with multinational IC companies, the growing Chinese IC companies are basically relying on their advantages in a certain field and developing rapidly in the sub-industry, especially in the field of mobile phones and smart cards, which have global competitiveness. But overall, China still lacks companies with complete product portfolios like Texas Instruments (TI), STMicroelectronics (ST) and Infineon. Not long ago, China's "National Integrated Circuit Industry Development Promotion Outline" pointed out that it would establish a "National Integrated Circuit Industry Investment Fund" in the hope of promoting China's IC industry to become bigger and stronger through mergers and acquisitions in the capital market.

Team size doubled, number of development projects slightly decreased

The "Survey of Chinese IC Design Companies" has added a new item of the establishment time of each company since last year. The results of last year showed that 40% of Chinese IC companies were established 5-10 years ago, which shows that the Chinese IC industry has stepped out of its embryonic stage and entered the growth stage. In addition, according to this year's survey, the number of employees in Chinese IC companies has increased from an average of 194 last year to 263, showing a leapfrog growth in the number of company employees. Among them, the number of IC design engineers has also increased from an average of 109 to 160.

Figure 2: Number of employees and IC engineers in the respondents’ companies.

It is not difficult to find that in this leapfrog growth, the proportion of IC design engineers in the number of company employees has become larger, but compared with the expansion of company scale, the number of projects they are engaged in has decreased from an average of 8.5 to 7. This obvious contrast shows the impact of increased difficulty in product design, faster time to market, and increased wafer costs, and also reflects the technology-intensive characteristics of the industry and the desire for a successful first wafer. Under this trend, increasing design reuse, purchasing third-party IP, and design outsourcing are all major demands of the future IC industry.

IP application popularization and design iteration become new challenges

The number of respondents who use IP cores (including soft cores, hard cores and firmware cores) has increased significantly, and the number of respondents who have never used IP cores has dropped from 27% to 14%. The use of IP cores has become a normalized design in China's IC industry. The proportion of respondents whose companies provide IP products has increased from 23% to 28%; and the normalization of the use of IP cores is accompanied by the problem of "IP verification". Among the product development challenges, 22% of the respondents chose this, becoming the number one design challenge in product development.

Figure 3: Respondents’ company IP core usage has increased significantly.

In addition to the three historic challenges of 'cost, low power consumption, and design cycle', the number of respondents who have the problem of 'design iteration' has increased sharply from 4% to 22%. Design iteration is not just a pure technical decision, but also means a fundamental change in the way design projects are adopted, requiring the entire project team to change the way they work and interact. Under the pressure of the above three historic challenges and the trend of team size growth, paying attention to the issue of design iteration will be a factor that Chinese IC manufacturers need to consider.

Digital IC process miniaturization accelerates the maturity of analog/mixed-signal IC processes

Regarding the most advanced process used in mass-produced mixed-signal ICs, the percentage of respondents using 0.13 micron and below processes has not changed much, remaining at 29%, while the percentage of respondents using 0.18 micron processes has increased from 14% to 31%. Regarding the most advanced process used in mass-produced analog ICs, the percentage of respondents using 0.13 micron and below processes has decreased from 30% to 23%, while the percentage of respondents using 0.18 micron processes has increased from 14% to 28%.

Figure 4: More than 51% of the surveyed companies use processes below 45nm in digital IC design.

In terms of the most advanced process used in mass production of digital ICs, the number of respondents choosing below 28nm and 45nm increased sharply from 7% and 18% to 29% and 22% respectively. Obviously, analog and mixed signal ICs did not pursue more advanced manufacturing processes like digital ICs, but the number of respondents choosing the 0.18 micron node increased significantly. According to some analog IC manufacturers interviewed in the past year, the over-fragmentation of the analog IC market is not suitable for the mass production of digital ICs. They believe that the lower node manufacturing process does not significantly improve the performance of analog ICs, but it is more expensive, and mature manufacturing processes are easier to achieve better quality control.

Foundries with leading process capabilities are more favored

根据去年的调查，在‘哪一家半导体代工夥伴最适合贵公司的产品’问题中，回答台积电(TSMC)和中芯国际(SMIC)的比重相同，均为24%，而今年选择这两家代工厂的比例均明显上升，台积电为40%，中芯国际略微落后为32%。从实际设计能力来看，中国IC公司已经有几家公司的产品采用了16nm制程，再观察本次数位IC制程在28nm及以下回覆者的成长比例以及ASIC闸数超过千万闸的回覆者占41%来看，不难联想到中国IC公司对制造制程的要求提高，使得选择重心更倾向于技术能力更强的代工厂。

Figure 5: Problems encountered by the respondents’ companies when working with foundries.

Another way to verify this trend is in the item "Problems encountered in cooperation with foundries". Although "high cost" and "long delivery cycle" are still the two main problems, the respondents' attention to these two items has obviously decreased. The three major challenges of "incomplete IP library", "gap between design and manufacturing", and "inappropriate process technology" have an upward trend. In addition, the proportion of the two responses of "long delivery cycle" and "inadequate production capacity" has dropped significantly this year, which is much better than last year.

The communication business has a promising future, while the consumer electronics sector is still the mainstream

In the computer field, the proportion of desktop computers and notebook computers has decreased. This year, a new option is small servers, with 16% of respondents indicating that they provide products in this field. In the communications field, last year's respondents have increased their product categories in this field. Due to the issuance of 4G licenses in China, and the fact that 4G base stations are basically newly built, the construction of millions of base stations has brought huge growth opportunities to Chinese IC manufacturers. The option of base station equipment is a new option last year (6%). In the context of national infrastructure construction, the proportion of respondents this year has soared to 17%.

Figure 6: Distribution of application areas of IC products of the respondents’ companies.

In the field of consumer electronics (CE), according to the statistical results of previous years, this field is one of the fields with a fast focus change. Based on the latest market trends, two new product categories, "wearable devices" and "smart routers", were added to this year's survey, which received 21% and 18% of the responses respectively. On the other hand, it also lowered the response ratio of all other categories of consumer electronics.

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