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It took several years of intense development efforts, but it was all worth it. Shanghai now gasconades the most complete IC industrial chain in China with wafer foundries Semiconductor Manufacturing International, Grace Semiconductor; HeJian Technology; Advanced Semiconductor and TMSC (Shanghai); IC design houses Huahong Group, Spreadtrum Communications, Sino Wealth and Shanghai Fudan Microelectronics; assembly and test companies Shanghai HongSheng, Shanghai Matsushita Semiconductor, Intel Products (Shanghai), Nantong Fujistu, STATS ChipPAC (Shanghai) and Advanced Semiconductor Engineering (Shanghai); and device and material firms Shanghai Shenhe, DISCO Technology (Shanghai), Mitsui High-Tec (Shanghai), Applied Materials; and TEL (Shanghai) among the key players in this urban success story.
Most of these companies are located in Pudong District, the site for IC manufacturing, and in Songjiang and Nanhui Districts, which together form the home base for assembly services. The Pudong microelectronics industry belt, consisting of Zhangjiang High-Tech Park, Jinqiao Export Processing Zone, Waigaoqiao Bonded Area, and Caohejing New Technology Development Zone, is known as the "Golden Triangle" of Shanghai’s chip manufacturing industry and houses both front- and back-end manufacturing facilities. "For the past two years, Pudong alone has established a monthly production capacity of 100,000 8-inch wafers," said Zou Shichang, chairman of the Shanghai Integrated Circuit Industry Association (SICA).
Rise and shine
Shanghai’s chip industry plays a key role in China’s rising economic status. Data from SICA revealed that the 2006 revenues from Shanghai’s IC sector reached about $5.3 billion, accounting for nearly 40 percent of total national earnings. For 2007 results, SICA anticipates revenues of about $6.7 billion from Shanghai, and by 2010, it will tip $13.8 billion, cornering one-third of the projected about $40 billion national IC industry earnings for that period.
Just like any success story, the journey to prominence is not without troubles. After two years marred with downturn, Shanghai’s IC industry bounced back to health in 2006, hitting revenues of close to about $306 million, a y-on-y increase of 55.83 percent. Among the city’s IC design companies, Huahong Group and Spreadtrum Communications grew at extremely rapid paces—the former expanding by 83.24 percent, and the latter by 59.5 percent. With sales exceeding about $53.3 million in 2006; Huahong Group grabbed the sixth spot in the top 10 list of China’s IC design companies. SICA projects 2007 revenue from Shanghai’s IC design industry will hit about $533 million, up 74 percent y-on-y.
However, some analysts point out that the sales of Shanghai IC design firms is unbalanced, taking into account the proportion of design houses in the city compared to the total for all of China. There are more than 400 IC design houses in the country, and 158 are found in Shanghai. The income of Shanghai’s IC design industry, however, accounted for only 12 percent of the national sum in 2006. Zi Xue, deputy secretary-general of SICA, believes that the cause of this discrepancy is the high technical starting point of Shanghai IC design companies. "Shanghai IC design firms generally selected some products with high technical threshold for R&D, which means long design cycle, high design difficulty and a long period for getting customers’ acknowledgement," he said.
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The top 10 IC design houses cement Shanghai’s rise to prominence. |
Lately, Shanghai is seeing the emergence of a number of IC design houses working on wireless technology. One of them is Spreadtrum Communications, which is focusing on baseband chip technology for GSM mobile phones. There is also COMMIT, which developed a complete terminal 3G TD-SCDMA chipset. Both RDA Microelectronics and Comlent Semiconductor on the other hand successfully developed CMOS RF chips, while Chipnuts has released the NX200 smart phone platform. As for Shanghai Jade, its new-generation of multimedia application processor got Nokia’s attention. | 