Development Status of China’s Regional Integrated Circuit Industries and Policy Collection
The recent ban on sales to ZTE has drawn wide public attention to the development status of the integrated circuit industry in various regions. The rise of mobile Internet, cloud computing, big data and internet of things have made China one of the world’s most important chip markets. In 2017, the sales value of the IC industry reached CNY 541.13 billion, increasing by 24.8% YOY.
The IC manufacturing industry grew fastest, with the growth of 28.5% YOY in 2017, and the sales value amounted to CNY 144.81 billion. The design industry and the packaging and testing industry continued to grow rapidly. The growth rates reached 26.1% and 20.8% respectively and the sales value were CNY 207.35 billion and CNY 188.97 billion.
In recent years, in order to develop the IC industry, China has given priority to integrated circuits. Fostered by the supportive policies of local governments, Hefei, Chongqing, Hunan, Zhejiang, and other provinces or cities are speeding up the construction of chip projects.
Related report: Research Report on China Integrated Circuit Industry, 2018-2022
Hefei, Anhui
Hefei has gradually developed into one of the fastest growing cities with the most significant effects in China’s IC industry.
- Industrial Status
Hefei has formed a complete vertical industry chain from design, manufacturing, packaging and testing to materials and platforms. There are 129 IC and related companies in Anhui, including 102 design companies, 3 wafer fabrication companies, 8 companies of packaging and testing and other 16 of equipment and material manufacturing. In 2017, the output value was CNY 23.56 billion and the investment reached CNY 7.25 billion. The average annual growth rate of each indicator exceeded 30%.
- Policy
The new taxation policy puts forward “two exemptions and three half reduction”. Since Jan. 1, 2018, newly-built IC manufacturers or projects, which produce less than 130 nanometers of IC lines and are operated for more than 10 years, will be exempted from income tax in the first two years. During the third-to-fifth year, they can only pay half of the income tax at the legal tax rate of 25%.
Xiamen
- Industrial Status
After full efforts over the past few years, the IC industry in Xiamen has laid a solid foundation. In terms of industrial space carriers, Xiamen relies on the Torch Hi-tech Zone and Haicang District to plan and construct space carriers such as IC manufacturing and supporting clusters, design and associated industrial parks, university scientific and technological parks and talent training bases.
In 2017, the IC output value reached nearly CNY 15 billion, increasing by about 40%. The output value of Xiamen enterprises with business revenue up to over CNY 20 million ranked in the top six in the country, and the output value of the design industry ranked fourth by growth rate.
On May 11, 2018, Equity Investment Fund was officially established by the Xiamen government and the IC industry. Its scale will exceed CNY 500 million.
- Talent Introduction Policy
Detailed Measures for Accelerating Development of Xiamen’s IC Industrywas released around May 2nd, 2018. It covers investment and financing policies, supporting areas, talent subsidies and research supports for the development of the IC industry.
TheMeasuresshows that Xiamen will establish an IC industry investment fund with a scale of no less than CNY 50 billion, which plays as parent fund and will direct social capital, industrial capital, and financial capital to the IC industry.
Zhejiang
Zhejiang Province is one of the key national IC industrialization bases, where the industry developed earlier and a group of strong enterprises gathered.
- Industrial Status
A group of key enterprises in Zhejiang are competitive in chip design, silicon material production, special chip manufacturing and industrial application. Also, a complete industrial ecology has been initially formed.
- Policy
In Dec. 2017, the Zhejiang government promulgatedImplementation Opinions on Accelerating Development of Integrated Circuit Industry.It proposes that by 2020, the revenue of the IC industry and related industries will be raised from the current CNY 50 billion to CNY 100 billion and the industry will be built into a heavyweight.
Hunan
- Industrial Status
Hunan Province has set layouts in all the industrial chain links of integrated circuit design, manufacturing, packaging and testing, equipment and materials. It has initially built three industrial clusters: Changsha Economic Development Zone, Changsha High-tech Zone and Zhuzhou CRRC. The main products involve information security, Beidou, industrial control, internet of things and consumer electronics.
In 2017, Hunan IC Association statistics showed that the sales revenue of Hunan IC companies reached CNY 17.934 billion. According to data released by China Semiconductor Industry Association, the IC design industry in Changsha increased at the annual growth rate of 431.40% in 2016, ranking second in the country, with the CAGR of over 50%. It is expected that the scale of the IC industry will be CNY 40 billion in 2020.
Chongqing
- Industrial Status
Chongqing is a pillar city of emerging electronics in China. In 2017, its output value of electronic manufacturing exceeded CNY 570 billion, accounting for about a quarter of the city’s total industrial output value. The investment and construction of the industrial city “Xinyun”, subordinated to Tsinghua Unigroup, will lend tremendous impetus to the IC upstream and downstream in Chongqing. The annual sales revenue will exceed CNY 100 billion after the industrial city is put into operation.
The Nan’an District of Chongqing plans to create “one valley and two parks” for the leading position of the IC industry.
Related report: Research Report on China Integrated Circuit Industry, 2018-2022
