Study sees emergence of China's fabless industry

Study sees emergence of China's fabless industry
By George Leopold, EE Times
March 7, 2003 (2:32 p.m. EST)
URL: http://www.eetimes.com/story/OEG20030307S0021

WASHINGTON — China's "long march" to create a fabless IC infrastructure will require the rapid introduction of home-grown design technology with commercial IP, according to a new study of China's semiconductor industry.

The survey of Chinese IC design companies by market researchers iSuppli Corp. (El Segundo, Calif.) concludes that after years of reliance on a "reverse engineering" design methodology, Chinese fabless companies have broken through in areas like smart card ICs, communications ASICs and even 32- and 64-bit CPUs.

Other hurdles Chinese designers must overcome during the next phase of development include producing designs with quality comparable to its foreign rivals and lowering costs through the use of local and international fabs.

Among the report's other findings:

Unlike U.S. "pure" fabless operations, China's IC design industry operates as a "hybrid bus iness" combining OEM-owned design centers and companies along with design centers operated by government institutes and universities.

A complete Chinese silicon supply chain will emerge over the next five years as Chinese fabless companies mature.

Design levels will remain at 1.0- to 0.35-micron for several more years with an advance to 0.25- to 0.18-micron process technology for CMOS products in the next two years.

Local design companies can design crank out more than 300 products designs a year, with design cycles ranging three to 18 months.

The report noted that China's membership in the World Trade Organization means there's no immediate need for integrated device manufacturers to move operations to China in order to reduce costs. However, the authors warn that overseas companies must continue to keep close tabs on intellectual property since some local fabless firms continue to reverse engineer products.