J. Microelectron. Manuf. 1, 18010105 (2018) doi: 10.33079/jomm.18010105

Editorial Introduction: 's IC industry has been flourishing in recent years, huge market demand together with government investments are the major driving forces for this development. The status and development momentum of the Chinese IC industry also attracted wide interest and attention of international counterparts. A group of domestic IC experts are invited by the JoMM to write a series of articles about China's IC industry, including the history, current status, development, and related government policies. Information in these articles is all from public data from recent years. The purpose of these articles is to enhance mutual understanding between the Chinese domestic IC industry and international IC ecosystem. The following article is the first one of this series, the status quo of China's IC industry. The IC industry chain is very long including design, manufacturing, special equipment, materials, packaging and testing. The article series are arranged in accordance with this order.

Current Status of the Integrated Circuit Industry in China

― IC Design Industry by: Lithotechsolutions.org

1. China's IC Design Market networking, industrial control and other terminal markets will also experience a period of rapid Since 2009, China's IC design industry entered development, the demand for chips will continue to a rapid development period, the industry sales grow and provide the IC design companies with revenue volume increased from 45.62 to 207.35 great development opportunities. billion yuan, with a compound average growth rate (CAGR) of 20%. By 2016, China's IC industry sales revenue reached 433.55 billion yuan with a growth rate of 20.1%, among which the IC design industry revenue reached 164.43 billion yuan, an increase of 24.1%, which is significantly higher than the overall growth rate of the global IC design industry.

Figure 2. The IC design industry growth rate is higher than the IC industry.

Figure1. 2009 ‒ 2017 China's IC design market sales trend

According to the domestic "Made in China 2025" project, "Internet +" project and as well driven by the increasing domestic and foreign investments, China's IC industry is expected to maintain rapid growth in 2018. During the next few years, the smart phone and other downstream products will keep Figure 3. IC design takes more proportion of IC industry growing, meanwhile the on-board electronics, during 2009 ‒ 2017.

1 Current Status of the Integrated Circuit Industry in China ― IC Design Industry

Table 1. 2015 National IC design industry development statistics

Regions and cities 2014 proportion 2015 proportion Shanghai 241.50 24.58% 278.23 22.54% Hangzhou 35.84 3.65% 36.82 2.98% Wuxi 60.00 6.11% 43.61 3.94% Yangtze River Delta Suzhou 22.01 2.24% 25.80 2.09% Nanjing 35.30 3.59% 35.00 2.84% 0.00% 1.38 0.11% Sub-total 394.65 40.17% 425.84 34.50% Shenzhen 243.50 24.78% 380.00 30.79% Zhuhai 19.21 1.96% 17.80 1.44% Hong Kong 9.16 0.93% 9.23 0.75% Pearl River Delta Fuzhou 15.30 1.56% 14.89 1.21% Xiamen 14.00 1.42% 18.00 1.46% Sub-total 301.17 30.65% 439.92 35.65% 170.20 17.32% 272.00 22.04% Tianjin 39.45 4.02% 11.98 0.97% Circum-Bohai-Sea Dalian 8.02 0.82% 6.12 0.50% Jinan 7.05 0.72% 5.11 0.41% Sub-total 224.72 22.87% 295.21 23.92% Chengdu 31.23 3.18% 31.00 2.51% Xian 22.50 2.29% 28.60 2.32% Midwest area Chongxing, Mianyang 8.21 0.84% 9.45 0.77% Changsha - 0.00% 4.14 0.34% Sub-total 61.94 6.30% 73.19 5.93% Total 982.48 100% 1,234.16 100%

In recent years, the importance of IC design computer chip design enterprises increased from 51 industry has been rising and it accounted for 36.71% to 107, the revenue increased by 27.23% from 8.845 of the whole integrated circuit industry in 2016. to 11.253 billion yuan; the number of multimedia chip design companies shrunk however the total 2. China's IC Design Industry revenue increased dramatically mainly benefiting Distribution from Omni Vision’s settling down in this country; the consumer chips market also expanded from After years of innovation and development, the 14.425 billion yuan to 31.152 billion yuan, a jump of domestic IC design industry has exhibited a over 100%. significant gathering trend. By the end of 2015, the industrial scale in Pearl River Delta, Yangtze River 3. China's IC Design Industry Delta, Beijing and Tianjin Bohai Sea, and the central International Competitiveness and western regions have reached 43.992 billion yuan, 42.584 billion yuan, 29.521 billion yuan and China's IC design industry has experienced 7.319 billion yuan, in total accounting for 30.65% of rapid expansion not only in the domestic market but the total national design industry, and the growth rate also in the global mainstream competitive landscape. reached 46.07%, 7.90%, 31.37% and 18.16% In 2014 HiSilicon, UNIS and Datang entered the respectively. world's top 25 IC design company list, in 2015 China By comparing the Chinese IC design enterprise took nine seats in the top 50 fabless companies, and distribution in 2015 and 2016, among the eight in 2016 this number rose to 11 as shown in Figure 4. essential areas including the communication, smart Comparing to the year 2009 in which only HiSilicon card, computer, multimedia, navigation, simulation, was in the top list, China's IC design industry has power and consumer electronics, etc., the number of largely grown.

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Table 2. Distribution of Chinese IC design companies. (Unit: 100 million RMB)

2015 2016 No. domain company proportion total sales company proportion total sales 1 Communication 157 21.33% 597.76 241 17.67% 688.40 2 Smart Card 39 5.30% 95.64 69 5.05% 131.67 3 Computer 51 6.93% 88.45 107 7.89% 112.53 4 Multimedia 93 13% 84.29 43 3.15% 176.69 5 GPS 33 4.48% 17.58 17 1.26% 2.92 6 Simulation 164 22.28% 120.76 219 1609% 64.74 7 Power 86 12% 85.44 77 5.68% 30.05 8 Consumption 113 15.35% 144.25 589 43.22% 311.52 Total 736 100% 1,234.17 1,362 100.01% 1,518.52

Figure 4. 2009 & 2016 Chinese IC design companies in the world's top 50.

In 2017 the domestic IC design industry has improved significantly. revenue has reached 207.35 billion yuan, an annual There are many segments of the integrated increase of 26.1%. Among China’s top ten IC design circuit industry. In details, application-specific companies, 's HiSilicon ranked the first for integrated circuit has increased largely and mainly its 36.1 billion yuan revenue, Spreadtrum ranked attributes to the consumer electronics, such as second with 11 billion yuan and ZTE ranked third mobile phone chips, chip set-top boxes, security with 7.6 billion yuan. The threshold level for the top cameras chips. Except for a handful of specific areas ten domestic IC design company revenue list is 2.05 occupying the high end market, for example, Huawei billion yuan. HiSilicon 400G core router autonomous chip was Currently the mainstream of China domestic launched ahead of its competitor Cisco in 2013, and design industry employs the 90nm ‒ 28nm node HiSilicon high-end mobile phone application technology while some has begun using the processor chip lead the application of advanced advanced 16/14nm process. Shanghai is among the 10nm node process, others are mostly focused at the leading domestic IC design industry regions. In 2017 low-end level. Spreadtrum’s 2016 chip delivery Shanghai’s mainstream IC design industry was at accounted for 42% of the world's low-end market, 90nm ‒ 65nm ‒ 40nm level with some has reached accounting for 37% of global revenue and entered 16/14nm level, meanwhile the 10nm design the top three smartphone chip manufacturers, and technology was under development. China's IC exhibited significant advantage in the low-end smart design enterprises have promoted into the world's phone chip market. In eight areas of communication, first camp, and their international competitiveness smart card, computer, multimedia, navigation,

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Table 3. 2017 China's IC design industry's top ten company ranking.

Ranking Company Name Sales (million RMB) 1 HiSilicon 361 2 UNIS Spreadtrum 110 3 ZTE Microelectronics 76 4 Huada Semiconductor 52.1 5 IPCore Microelectronics 44.9 6 Goodix 38.9 7 Hangzhou Silan 31.8 8 Focaltech 28 9 Galaxycore 25.2 10 Vimicro 20.5

simulation, power and consumer electronics, the more than 100 countries and regions. In the digital communications chip design accounted for 50% of media field, it provides chips and solutions for the market volume due its large growth and huge network monitoring, video phone, DVB and IPTV. market capacity, while other areas of the industry are For video applications, HiSilicon launched the relatively small. world-leading intelligent IP cameras, smart set-top Regarding to the high-end general-purpose chip boxes and smart TV chips and end-to-end solutions design, there is still big gap between China and including the provision of image acquisition, decode overseas, and China is still highly dependent on and display full 4K. Regarding to the IoT, HiSilicon external supplies. Among China's IC imports of more introduced PLC/G.hn/802. than 200 billion US dollars a year, the two types of After twenty years’ development, HiSilicon has high-end general-purpose processors and memory produced more than 200 kinds of chips, and applied chips together accounted for more than 70%. for more than five thousand patents. Particularly Loongson has developed fast in recent years, their Kirin series chips have been at the forefront of however it was only limited in the military the world which is a remarkable achievement of applications, and was still far from the civilian use. China's IC industry. Three major memory projects have just launched, and regarding to the FPGA and other high-end general-purpose chips, domestic supply remains blank.

4. China's Top Ten IC Design Companies

4.1. HiSilicon

HiSilicon Technologies Co., Ltd. was established in October 2004, its predecessor Huawei IC Design Center was founded in 1991. It is headquartered in Shenzhen, with design offices located in Beijing, Shanghai, Silicon Valley and Sweden. HiSilicon products cover wireless networks, fixed networks, digital media and other areas of chip Figure 8. 2017 annual revenue of global smartphone solutions, which have successfully been applied in processor market.

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Although HiSilicon takes a large share of circuits industry. In 2016 Spreadtrum achieved the China's mobile phone chip market, there is still big authorization of the ARM V8 architecture processors gap comparing to Qualcomm, Apple and other for mobile phones in order to carry out the world's leading mobile phone chip companies. development of domestic self-control architecture According to Strategy Analytics’ research service CPUs. report on handset component technologies, 4.3. ZTE Microelectronics Qualcomm, Apple, MediaTek, HiSilicon and Samsung LSI are the top five in 2017 global smart ZTE Microelectronics Technology Co., Ltd. phone application processor (AP) market. Its data (hereinafter referred to as "ZTE Microelectronics") indicates that in 2017 Qualcomm took 42% revenue was registered in 2003. ZTE Microelectronics is share, followed by Apple 22% and MediaTek 15%, dedicated to becoming the world's leading integrated and HiSilicon 8%. chip supplier bases on its communication technologies. ZTE Microelectronics owns the world- 4.2. UNIS Spreadtrum class IC design and verification technology, Spreadtrum was founded and headquartered in advanced EDA design platform, COT design Shanghai in April 2001, and have established R&D services, development process and standards, and centers in Shanghai, Beijing, Tianjin, Suzhou, successfully produced over 100 commercial chips Hangzhou, Chengdu, Xiamen, San Diego, San Jose covering communications networks, personal and Finland. It also has technical support center in applications, intelligent "cloud" applications, Shenzhen and international support offices in Taiwan, everywhere over the country. India, and Mexico. Spreadtrum’s products support ZTE Microelectronics has nearly 20 years of multiple broadband wireless communication research and development history of IC products. standards including GSM, GPRS, EDGE, TD- Baseband and intermediate frequency chip wireless SCDMA, W-CDMA, HSPA +, and TD-LTE. core solutions are the major development directions Unisplendour Group acquired the Spreadtrum of this company. Regarding to the wireless terminal Communications in 2013, the RDA in 2014, and chips, ZTE Microelectronics launched the NB-IoT integrated them to be UNIS Spreadtrum in 2016. pre-commercial chips in 2016, and has completed After the integration the Spreadtrum was dedicated the laboratory testing and field testing with a number to independent research on 2G/3G/4G mobile of operators, road test terminals based on these chips communication baseband chips, RF chips, IoT chips, are being adopted by a number of native and TV chips, imaging sensor chips. Its product line overseas operators to their NB-IoT network covers mobile phones, tablets, networks, smart constructions. For the wired chip systems, ZTE wearables, navigations, imaging devices, and digital Microelectronics’ ONU terminal chip sales firmly televisions. remain global top three. In 2016, its industry's first Spreadtrum is rooted in China and aims at the full-mold 10G PON chip was released and rapidly global market. It has established good cooperation gained the gigabit market, and then it continuously with domestic and foreign leading manufacturing launched the mobile telecommunication and and design companies including Samsung, HTC, intelligent gateway related chip solutions, these Huawei, , TCL and other 1,300 counterparts. products have achieve good results and reputation In 2015 Spreadtrum shipped 700 million chips, its through the operator tests. In addition, ZTE’s self- cell phone baseband chip took the third largest share developed 80G OLT processor, 500G packet in the world, and was ranked the world's top ten IC switching chips, 100G network processor chips have design companies. In 2014 Spreadtrum and the achieved commercial success. In the multimedia chip global chip giant became strategic alliance to field, ZTE Microelectronics captured the 4K ultra jointly launch the mobile device development based HD conversion opportunity and launched a series of on the Intel architecture. The preliminary result of full 4K multimedia chips to complete the set-top box cooperation ‒ the first x86 architecture based system industry layout, the video quality and power chip was launched to the market in 2016. In 2015 the performance reached the industry-leading level. ZTE National Integrated Circuit Industry Investment Fund also introduced the PON + IPTV integration program and Unisplendour Group reached a strategic and became one of the few manufacturers which investment agreement of ten billion yuan for may independently provide mature and stable improving the core competitiveness of the integrated integrated media gateway solutions.

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4.4. Huada Semiconductor cover, the world's first live fingerprint detection chip Live Finger DetectionTM on a mobile terminal, the Huada Semiconductor Co., Ltd. is the world's first screen under optical fingerprint subsidiary of the China Electronics Corporation recognition technology (IN-DISPLAY (CEC). It has three subsidiaries, Shanghai Belling, FINGERPRINT SENSORTM), etc. Hongkong Solomon Systech as well as CLP Goodix Technology has become one of the top Holdings, with a total asset of over 10 billion yuan. manufacturers for the Android fingerprint Huawa was founded in May 2014 in Shanghai, and recognition mobile phone chip with the largest specializes in the design of integrated circuits and market share, second to AuthenTec which is Apple’s related solutions. supplier of fingerprint identification technologies. In Huada Semiconductor’s product category 2017 Goodix Technology took 35% share of the includes: industrial control MCU, power and driver Android fingerprint identification chip market, and chips, smart cards and security chips, power this number is expected to reach 50% in 2019. management chips and novel graphics chips. In recent years Huada Semiconductor experienced rapid 4.7. Silan Microelectronics growth in the industrial control MCU market. It Silan Microelectronics is headquartered in ranked ninth in the MUC global semiconductor Hangzhou Hi-tech Industry Development Zone market, and took a share of 1%, however there is still dedicated to integrated circuits and microelectronic a big gap between Huada and the international giants product design and production. Its production line in the field such as Renesas and NXP. includes power drivers, semiconductor devices and 4.5. IPCore Microelectronics modules, MCU, audio and video SOC, MEMS sensors and LED chips, among which the LED Beijing IPCore Microelectronics Technology driver chip brings its main business income, and it Co., Ltd. is a subsidiary of the State Grid has been dominating the LED lighting market. Information & Communications Industry Group. It was founded in January 2010 and headquartered in 4.8. Focaltech Changping UHV base. Its business covers the field Focaltech is a global leader in the industry of of power, information and communication, energy multi-finger capacitive touch screen technologies, is conservation and environment protection, finance, among the best global providers of capacitive touch- municipal and modern services, among which the screen chip provider. It can support 1 inch ‒ 25 inch key three areas are sensor chips, communication various structure, process and material capacitive controls and power distributions. At present, the screens in order to provide global users with company's assets exceed 2 billion yuan and complete capacitive touch-screen solutions. operating revenue is around 4 billion yuan, making it Focaltech is dedicated to independent development the only Chinese power industry company that is and holds over 600 patents. In addition to the support engaged in the development, production and of traditional touch module, it also aims at high end experimental verification of chips. applications in the in-cell and on-cell field, and 4.6. Goodix Technology developed advanced manufacturable solutions to meet the needs for lightweight touch screens. Goodix Technology was established in 2002 as a global leader of the human-computer interaction 4.9. Galaxycore and biometric technology, and has established a Galaxycore Microelectronics (Shanghai) Co., leading position in the field of smart mobile devices Ltd. was founded in 2003 as China's leading image including mobile phones, tablets and wearable sensor chip design company targeted the global products, etc. It launched the world's leading single- mobile device and consumer electronics market. Its layer multi-touch chip and the world's first touch product line includes imaging sensor chips mainly screen near-field communication technology Goodix used for phones, tablets and other mobile terminals, LinkTM, the world's first fingerprint pressure as well as LCD driver chips. identification chip applied on the front of the Android phones, the world's first invisible 4.10. Vimicro fingerprint sensor (IFSTM), the world's first fingerprint identification chip supporting the glass In 1999, a few entrepreneurs came back to

J. Microelectron. Manuf. 1, 18010105 (2018) 6 Current Status of the Integrated Circuit Industry in China ― IC Design Industry

China from Silicon Valley and founded the Vimicro in Beijing Science Park under solid support from the state and local government. It undertook the national strategic "Starlight China Chip Project" and was dedicated to the development of the digital multimedia chip design and industrialization. During the last two decades, the "Starlight" digital multimedia chip products have been successfully released to the global market, and were widely used for the high-growth multimedia applications on PCs, broadband internets, mobile communications and information home appliances. Its products have reached over 16 countries and regions including Europe, America, Japan, Korea, etc., with clients including Sony, Samsung, HP, Philips, Fujitsu, Logitech, Huawei, Lenovo and many other well-known domestic and foreign enterprises. Vimicro occupies more than 60% share of the global computer image input chip market.

Acknowledgments

We would like to extend appreciation to the graduate students: Weichen Liu, Tianyang Gai, Cheng Guo, Pengzheng Gao from the Institute of Microelectronics of Chinese Academy of Sciences (IMECAS) and Lei Qu from North China University of Technology for their contribution of contents.

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