China SIA：China IC industry Worth $12.5bn

China made $12.5bn-worth of ICs last year, reports the China Semiconductor Industry Association, of which $5bn came from IC design, $3.7bn from IC fabrication and $3.8bn from IC packaging and testing.

China invested $10bn in the memory industry, because it is the largest memory market and buys 75% of the global memory. Most  Chinese IC design companies rely on parent companies that are partly state-owned enterprises, says the report, with “almost no” independent IC design companies in existence. For example, the parent company of Nari Smart-chip Microelectronics is a subsidiary of State Grid, with main products smart meter ICs and a monopoly position.

The parent company of CEC Huada is China Electronics Corporation (CEC) which monopolises the ID card-use IC market. Non-state-owned large enterprises Huawei, ZTE, Datang Telecom (with TD-SCDMA technology) and SMIC Microelectronics act as the backers of Hisilicon, ZXIC, Leadcore Technology and Galaxycore respectively.

Independent IC design companies include Spreadtrum, RDA, Rockchip and Allwinner Technology. Spreadtrum and RDA need a lot of money but hold limited financing channels and have been acquired by state-owned enterprises.

The major shareholders and technology sources of Goodix and FocalTech are actually Taiwanese companies.

In mainland China, IC design companies are highly dependent on the mobile phone and tablet PC markets. Some companies are even completely dependent on the smartcard market, such as Nari Smart-chip Microelectronics, Fudan Microelectronics and Hua Hong Integrated Circuit.