How policies encourage innovation in the IC industry

In recent years, due to the rise of the consumer electronics Shanzhai industry in mainland China, driven by the needs of downstream users, the domestic integrated circuit design industry has really emerged a group of commercially successful companies in the SOC field.

On March 16th, Peng Hongbing, deputy director of the Electronic Division of the Ministry of Industry and Information Technology, stated at the annual conference of the Chinese semiconductor market in 2014 that there are four major directions for the development of the IC industry that will be introduced, including encouraging innovation.

Similarly, as the cornerstone of the information industry, compared with the issue of software piracy, there appears to be no intellectual property issue in ICs in the domestic public's impression. There are very few infringement lawsuits in the IC industry. In fact, the establishment of an integrated circuit intellectual property protection system really stems from the pressure that Japan’s success in catching up with the United States brought to the United States. As a chaser, the imitation and improvement through reverse engineering are inevitably inevitable, and legal systems such as copyright, patents, and unfair competition all have innate legal defects that can bypass the past.

Taking into account the importance of the integrated circuit industry to national defense and prevention of overtaking by Japan, the United States Congress enacted the first legislation specifically for the protection of integrated circuit intellectual property rights in 1984, the "Semiconductor Chip Protection Act of 1984," which acted in one step. It fills the gaps in the legal systems of copyright and patents and other types of knowledge, and even extends the protection of integrated circuit products to electronic whole systems using infringing devices.

However, the technological advancement in the field of integrated circuits and the speed of upgrading have quickly made the imitation model lose its market value. "For integrated circuits, the so-called trade secret protection issue is not so important, because analysis, plagiarism, and alterations to others' designs are not as economic as designing themselves. Real trade secrets exist only in the human brain. The so-called core technology is people, not Those drawings and data.” Ted, a CTO of Silicon Valley IC Design Company, told the reporter of “China Sankei Shimbun”.

"If the technical complexity of an integrated circuit product is easily copied, it means that there will be many companies that have the ability to introduce similar products, leading to a price war. This is also in the area of ​​many types and specifications of integrated circuit products, when Asian companies When joining the ranks of the competition, the gross profit rate will drop rapidly, because the price war will be very fierce. And the gross profit rate of the technology-leading U.S. companies can be stable at 40%-50% or even higher for many years.” Ted told reporters An analysis of the competitive characteristics of the industry.

In recent years, due to the rise of the consumer electronics Shanzhai industry in mainland China, driven by the needs of downstream users, the domestic integrated circuit design industry has really emerged a group of commercially successful companies in the SOC field. However, these domestic SOC solutions do not actually have much of their own IP content.

At the end of 2013, the most advanced 28-nanometer IC production line in mainland China was officially put into production at SMIC's Beijing-based plant. What is embarrassing is that within the IC industry, it has not been confirmed which domestic company has successfully launched 28-nm. design.

"At present, SMIC is looking for contract manufacturers to establish an IP library for its 28-nanometer production line. It is said that the source of funding will include the national government's major special fund for science and technology." Ted believes that with the popularity and complexity of SOC, There will be fewer and fewer design companies offering products for downstream users, and a large number of design companies will be transformed into IP suppliers. The trend of the American venture capital industry has already reflected this trend.

“If the national policy emphasizes encouraging innovation, then it will be a test for the survival of many domestic design companies. Many returnees can get local government venture capital when they return home. Although they are technically unleaded and difficult to manage, their existence value. It is only to fill the gaps in the country," said a local high-tech district worker who declined to be named.