China Sees Need to Create Chinese Intel

--by Shanghai Daily

THE Chinese semiconductor industry needs industrial restructuring and consolidation to create internationally competitive firms, the Ministry of Industry and Information Technology said yesterday.

The next-generation chip design and manufacturing requires huge investment and talent. Because of a lack of capital and talent, Chinese firms are lagging behind global giants like Samsung and Qualcomm. The technology gap between the domestic semiconductor industry and its overseas peers has been widening, said Ding Wenwu, director general of the ministry's electronics information division.

"China doesn't have a leading firm in the semiconductor industry, like Intel, Samsung or Qualcomm," Ding said during the IC China 2012 conference held in Shanghai yesterday.

He said the government is drafting plans to encourage industry consolidation but he didn't elaborate.

The revenue of the chip design sector surged 20 percent in the first six months, triple the integrated circuit industry's growth rate.

In the first half, China's IC revenue totaled 85.2 billion yuan (US$13.5 billion), up 7.5 percent annually. It accounted about 10 percent of the global IC market, the China Semiconductor Industry Association said.

Meanwhile at the IC China 2012, Applied Materials Inc, a US-based semiconductor equipment provider, signed a memorandum of understanding to enhance the Shanghai Integrated Circuit R&D Center's research and development capabilities in 12-inch wafer manufacturing.