CCID Consulting: China’s IC Industry to Embrace a Golden Age

BEIJING — (BUSINESS WIRE) — May 17, 2011 — Since 2000, China’s IC (integrated circuit) industry has experienced a decade with high-speed development. By the end of 2010, the IC industry’s annual sales revenue reached RMB 144.015 billion, doubling that of 2000, and China was one of the world’s fastest-growing regions in the IC industry during the decade. China’s IC industry size accounted for about 8.6% of the world’s total in 2010, compared with 2000’s less than 4.5%. At the same time, the entire industry’s technical capacity was strengthened in a fast manner. For instance, the chip production technology reached the world-class milestone of 65 nanometers, while major innovations were recorded in other products, including mobile phone chips, IC chips, digital TV chips, special telecommunication chips and multi-media chips.

Although China’s IC industry is on a fast growth track, the country still heavily depends on IC imports to satisfy the fast-increasing domestic demand. China’s IC imports were valued at $157 billion in 2010, and IC products defeat crude oil to be China’s biggest import item in 2009 and 2010. Meanwhile, the domestic market still has a great potential for future growth.

2011 is the first year of China’s 12th Five- year Plan. In the coming 5 years and even 10 years, the IC industry will continue to be backed by various positive factors.

First, the domestic policy environment will further improve. In January 2011, the State Council issued “The notice of the State Council about the printing and distribution of several policies for the further encouragement of the development of software and IC industries”, also referred to as State Douncil Document No. (2011)4; the No. 4 Document offers various preferential conditions for the IC industry covering finance and tax, investment and financing, research and development, import and export, talent, intellectual property rights and market aspects, and will benefit not only design and production enterprises, but also packaging, testing, equipment, materials and other upstream and downstream enterprises in the industry.

Second, the strategic emerging industries will bring more development opportunities for the IC industry. In Oct, 2010, the State Council officially issued “The decision of the State Council on accelerating the cultivation and development of strategic new industries”, with an aim to accelerate the cultivation and development of the next generation information technology, energy-saving and environment protection, biological industry, high-end facility manufacturing industry, new energy, new materials and new-energy automotive. For the next-generation information technology, the focus will be put on high-performance IC, Internet of things, tri-network convergence, new display technology and the next-generation Internet.

Third, the capital market will offer more financing opportunities for the enterprises. The launch of second board in China’s stock market has partly broken the financing bottleneck faced by the domestic IC enterprises. The success stories of capital rising on the second board are set to encourage more fund and talent investment in IC design. Besides, the State Council’s No. 4 Document also proposes encouraging the IC industry financing activities with central government investment, industry investment fund, bank loans and the enterprises’ own fund raising.

With the mentioned opportunities, China’s IC industry is expected to accelerate its growth during the 12th Five-year Plan period. According to the state’s stipulations, by 2015, the size of China’s IC industry will double that of 2010, with a turnover exceeding RMB 300 billion and China’s share in the global market up to 14% to satisfy 30% of the domestic demand. At the same time, China’s chip design capability will experience a great leap to own a certain number of independently developed key chips, with the capability to mass produce 12-inch chips using 45-nanometer and 32-nanometer techniques, while the industry will conduct forward-looking research and development of the 22-nanometer technique. Meanwhile, China’s package testing will reach a world-class level.

In order to achieve these goals, China’s IC industry will enhance its efforts in the development of high-performance IC products, accelerate the development and upgrade of advanced chip production lines, enhance the package testing capabilities and support breakthroughs in special manufacturing equipment, materials and EDA tools. In general, China’s IC industry will enter a golden age of development driven by the demand from strategic emerging industries and the support of China’s industry policies under the guidance of the 12th Five-year Plan’s industry plans.

About CCID Consulting Co., Ltd.

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China. With its powerful industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services. The company's customers range from industrial users in electronics, telecommunications, energy, finance and automobile to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming China's No.1 advisor for enterprise management, No.1 consultancy for government decision and No.1 brand for informationization consulting.

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