China’s state-backed National IC Investment Fund is to shift its investment focus to the Chinese chip designing sector from the chip manufacturing sector, as Beijing is trying to boost China’s role in the global semiconductor industry, TrendForce Corp (集邦科技) said yesterday.
The fund has committed to investing about 70 billion yuan (US$10 billion) in China’s semiconductor industry since its creation lst year, according to TrendForce.
About 60 percent of the investments have been allocated to building semiconductor wafer fabs, the researcher said in the latest report.
China’s Tsinghua Unigroup Ltd (清華紫光), Apex Microelectronics (珠海艾派克微電子) and ZXIC (深圳中興微電子), a chip design unit of ZTE Corp (中興), have received financial support from the fund, TrendForce said.
Overall, Chinese and foreign semiconductor companies in China have invested 480 billion yuan in wafer fabs from the beginning of last year to this month, the report said.
About 86.5 percent of the amount, or 435 billion yuan, came from state-backed funds, including the National IC Fund and local funds for IC ventures, TrendForce said.
As a result, China’s 12-inch wafer capacity is expected to surge from 373,000 wafers per year to 620,000 wafers per year over the next three years, it said.
The fund is to shift its focus to China’s fabless chip design and chip packaging and testing sectors from chip manufacturing, TrendForce said.
The fund would inject capital into Chinese design houses to improve their innovative capabilities and to help them clinch overseas merger-and-acquisition deals, it said.
“The new capital injection will increase market competition. Ultimately, China will reduce the technological gap between itself and Taiwan, not to say the gap is already shrinking rapidly,” Lin Jian-hong (林建宏), a semiconductor analyst with TrendForce, said on the telephone.
“To fend off competition from Chinese rivals, Taiwanese firms need to deepen the partnership with their customers,” Lin said.
China’s chip designers have seen their total global market share surge to about 10 percent this year from 5 percent five years ago, according to TrendForce’s statistics.
Taiwan holds about 18 percent to 20 percent, the researcher said.
The number of China’s fabless IC design companies almost doubled this year to 1,362, among them Hisilicon Technologies Co (海思半導體) and Spreadtrum Communications Inc (展訊), compared with 736 last year, according to TrendForce.
The number is about 13 times of the number in Taiwan, where about 100 chip designers operate.