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Are we losing our semi design industry to China also?
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Thursday, June 16, 2011
As VC money for chip companies has dried up on Sand Hill Road, the semiconductor industry has effectively migrated to China – along with talented Chinese engineers armed with U.S.-earned Ph.D’s and the hands-on business experience gained as prize recruits in Silicon Valley companies.
Indeed, Chinese fabless companies are springing up across the country -- as many as 300 of them, according to industry estimates. The Chinese government, abetted by Western companies, offers these startups an unprecedented array of competitive advantages, including access to funding, IP cores, tools, engineering talent and foundry agreements.
In the last two years alone, IP suppliers such as ARM, CEVA, MIPS, Tensilica, Silicon Image and others have seen a growing interest among Chinese fabless companies in licensing their IP cores. Growing respect here for a “grown-up” Chinese semiconductor sector suggests a vastly altered future for the industry.
China’s chip industry has come a long way from the days of Chen Jin, the disgraced Chinese engineer who rocked the domestic industry by leveraging government funds to “invent” its first DSP, dubbed “Hanxin.” In 2006, three years after the China Chip emerged, it was shown to be a fraud. Chen Jin’s team had simply scratched Motorola’s trademark from a prototype chip and replaced it with the “Hanxin” label.
Even among credible fabless companies in China, huge disparities in capabilities remain. Noting a sharp and growing polarity among Chinese chip companies, Vincent Gu, senior analyst at IHS iSuppli, predicts that fabless chip companies in China will shake out to a total of about 150 in the next three to five years.
That prediction illustrates one constant of the Chinese market: nothing stays constant for long.
By: DocMemory
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