In-Depth Investigation of China's Chip Industry | IC Design: Only Huawei Dares to Say No to QualcommThe ZTE incident erupted like a sharp blade exposing the shortcomings of China's chip industry, its impact rippling outward like a boulder dropped into a deep pool. Never before has the chip industry received such urgent attention from the media, the public, and even top national leadership.Reality remains harsh. In this high-tech industry vital to the nation's economic arteries, China still holds little sway. In 2017, China's integrated circuit imports reached $260.14 billion, a year-on-year increase of 14.6%. Analytical data reveals that in areas such as memory chips, servers, personal computers, and programmable logic devices, the market share of Chinese chips is virtually zero.Due to high technical barriers, massive investment requirements, and a scarcity of high-end talent, Chinese integrated circuit enterprises still lag significantly behind global giants in this cutting-edge industry.Yet change is underway. Spurred by the wake-up call of the ZTE incident, policy implementation has begun, with local governments and social capital actively promoting progress. China's semiconductor industry is on the eve of explosive development.A cohort of outstanding semiconductor enterprises has emerged. Leaders have appeared in segments including IC design, wafer foundry, packaging and testing, semiconductor materials, and specialized semiconductor equipment, with some even becoming world leaders in their niches. These companies represent the ambition driving the rise of China's integrated circuit industry.Simultaneously, government-guided funds, exemplified by the National Integrated Circuit Industry Investment Fund (the "Big Fund"), continue to emerge, alongside an influx of social capital. Excellent investors are infusing fresh vitality into China's chip industry through financial power.As the global semiconductor industry enters an era dominated by giant monopolies and frequent vertical integration, how can Chinese semiconductor companies carve their own path? At a time when foreign governments are imposing technological blockades on Chinese enterprises, how can Chinese companies achieve independent innovation? Faced with enormous capital requirements, how can semiconductor enterprises effectively leverage capital tools to drive industrial development?Against the backdrop of the rise of China's semiconductor industry, Ying Caimagazine launches a major feature project, cataloguing excellent enterprises across China's IC design, wafer foundry, packaging and testing, semiconductor equipment, and materials industry chains, assessing industry trends, and unearthing investment opportunities.Catching Up in Chip DesignAs the most critical segment of the semiconductor industry, the IC design market accounts for about one-third of the entire industrial chain's value. Globally, seven of the top ten companies are American, with Qualcomm, Broadcom, and Nvidia persistently occupying the pinnacle.Encouragingly, thanks to their powerful tech ecosystems and cross-border mergers and acquisitions, HiSilicon (Huawei) and Unisoc (Tsinghua Unigroup) have broken into the global top ten, becoming leaders among Chinese IC design firms.However, overall, Chinese chip design companies still trail far behind their American counterparts, not yet competing on the same level in terms of R&D capability, scale, profitability, and brand influence.According to data reviewed by Ying Caireporters, the total 2017 revenue of the listed Chinese IC design companies was approximately RMB 87.253 billion, while Qualcomm alone reported revenue of approximately RMB 108.177 billion (roughly 17.078billion).ThetotalprofitofthelistedChineseICdesigncompanieswasaboutRMB2.636billion,lessthanone?fifthofNvidia′sprofit(3.047 billion).Through screening and analysis, we have selected the four most capable companies—they are poised to be the vanguard challenging the world's giants in the future of China's IC design sector.
