Mainland China's major chip design companies invest in 28nm technology

SHENZHEN, CHINA: Mainland China's leading IC design businesses have adopted cutting-edge 28nm technology to develop chips, while 9.2 percent of local fabless companies are mass producing digital ICs using advanced 45nm or below process technologies, according to the 10th annual IC Design House Survey conducted by EE Times-China, a design engineering title of Global Sources' joint venture subsidiary, eMedia Asia Ltd.

Results of the survey were announced at the "2011 IC Design Industry CEO Forum & China IC Design House Awards", with over 150 senior executives from mainland China's IC design industry attending the event. Awards were presented to the Top 10 China Brands, Top 10 Most Promising IC Design Houses, Top 10 Outstanding Technical Support, as well as 25 Hot Products in five categories.

"In the past decade, we have witnessed the emergence and rapid growth of mainland China's IC design industry. When we first started our Survey in 2002, only 20 percent of local IC design firms used 0.25 micrometre or below process technologies, while over 72 percent of their counterparts in the US used 0.18 micrometre or below technologies. Even five years ago, the industry was at least two generations behind the US in terms of process technology," said Brandon Smith, publisher of EE Times-China.

"But this year's Survey indicates that mainland China's leading chip design companies are investing in advanced technologies such as the 28nm designs in order to reduce time-to-market and compete in the global market."

Rising use of Taiwan foundries
Survey findings also show that local IC design companies are increasingly using Taiwan foundries to support their high-voltage, high-reliability and high-integration designs. Of those who employ foundry services, 63 percent use foundries based in Taiwan, as compared with 57 percent in 2010.

A total of 33.1 percent find Taiwan-based TSMC to be their most suitable foundry partner (30 percent in 2010), while 18.9 percent and 15 percent say Mainland-based SMIC and CSMC respectively are their best suited foundries.

Mainland China's IC design industry is on a high-growth path. In a recent IHS iSuppli research, operations by fabless semiconductor companies in mainland China are forecasted to generate $10.7 billion in revenue in 2015, more than doubling from $5.2 billion in 2010.

Dr. Wayne Dai, chairman and CEO of Shanghai-based IC design firm VeriSilicon, said: "The current global environment is very conducive to the rapid development of mainland China's semiconductor companies. The focus of the world's semiconductor industry is increasingly shifting towards mainland China, which accounts for one-third of the global market. Mainland China's share of the world market is expected to continue to increase, and the government's support should help to further promote the industry's development."

Consumer electronics drives industry development
The Survey shows that 57 percent of mainland China's ICs are used for consumer electronics products such as mobile phones and tablet PCs. This market sector is characterized by rapid innovation and intense competition, which is expected to continue to drive the fast development of the local IC design industry.

Currently, 9.2 percent of respondent companies are mass producing digital ICs using 45nm or below process technologies. In the next few years, more major chip design companies in mainland China are expected to successfully develop ICs using advanced 40nm and 28nm process, although 65nm products are expected to be the mainstream in the digital IC segment, according to EE Times-China analysts.

While 23.2 percent and 27.5 percent of respondent companies are using 0.13 micrometre process technologies to make analog and mixed signal ICs, respectively, these two sectors continue to be dominated by 0.18 micrometre and 0.35 micrometre processes.

Other key findings of the survey
* The main difficulties when contracting foundries are still costs (59.8 percent) and cycle time (55.9 percent), while inadequate production capacity is less of a problem this year (19.7 percent, as compared with 35 percent in 2010).

* 35.2 percent of respondents get their IP core license from semiconductor foundries, 26.1 percent from design services companies, and 25.4 percent from ARM.

* Key challenges respondent companies face during the design process are cost reduction (69.7 percent), low-power design (54.2 percent) and design cycle time (46.5 percent).