| Shanghai, China — When MIPS Technologies Inc. opened an office and R&D center here earlier this month, some thought the core and intellectual-property provider was a little late in positioning itself in one of the world's largest IT markets. After all, its main competitor, ARM Ltd., has been in China for about two years. MIPS believes its timing is just right. China is preparing for a boom in digital TVs, network access is a brisk business, myriad smart-card projects are under way or on the drawing board, and more and more Chinese OEMs are looking to spin up internal IC design teams to tackle the consumer electronics market. This spells opportunity for both MIPS and ARM. To be sure, both will face challenges unique to the China market, ranging from intellectual-property protection to the daunting process of determining which of China's roughly 400 design firms are worthy of attention. MIPS is not a complete rookie in checking out the landscape, however. Although Taiwan has been the focus of its Greater China strategy, it has also been sending people in and out of China for years. Now it hopes to get an edge by having a China-based, six-person R&D team, which will focus more on the "D" in its early days as it brings hard cores to market and then slowly transition to more architecture research as MIPS' business grows. Already, the company has struck a few deals, one with video chip designer Huaya Microelectronics Ltd. of Shanghai, which will make a digital TV chip using the MIPS32 4Kc as a hard core in the 0.18-micron process at Semiconductor Manufacturing International Corp. Expect more of these deals soon, as MIPS qualifies the hard cores at other Chinese foundries. Most of the demand in China is for hard cores, for a few reasons. First, the faster time-to-market appeals to Chinese companies just as it does to companies elsewhere. In addition, the level of expertise and experience in China is not yet on a par with other regions of the world, so being able to reduce project risk by adopting a proven hard core is attractive. "It also offers some advantages from an IP-protection standpoint, so it's a good fit all around," said James MacHale, president of Asian operations at MIPS. Eventually, MIPS will offer synthesizable cores in China, but that's not likely to happen until the country's overall respect for IP improves. In short, it could be years before that happens, although, like many foreign companies in China, MIPS may find reasons to make exceptions in the cases of companies with a track record for honesty. One adjustment the company is already making concerns the terms through which some small companies can access its IP. Like other IP providers in China, MIPS is working with several regional IC design centers that serve as government-sponsored incubators. Small companies are vetted before they enter the program, where they have access to management advice, some venture capital, EDA tools and blocks of intellectual property. "The incubators are a very powerful structure," MacHale said. By providing early access to MIPS cores, without the burden of fees, companies can get started on designs, prove them out and raise more capital before going on to become a full licensee. "We can potentially make our technology available in a controlled fashion," he said. "These are practical steps that, with the assistance of the government, cannot so much just help the individual companies but perhaps help the growth of the industry, as it is still at a pretty early stage in China." | 
