Guide to Invest in Electronic Information Industryof Chengdu
August 2008
Contents
I. Industrial Status Quo
i. Industrial Basis
ii. Status of Industry Chain
1. Integrated Circuit Industry
II. Investment Environment
i. Human Resource
1. Human Resource Supply
2. Human Resource Cost
3. HR Service
ii. Infrastructure
1. Water Supply
2. Electricity Supply
3. Natural Gas
4. Storm pipes
5. Sewage pipes
6. Telecommunication and Internet
iii. Environmental Condition
1. Environmental Infrastructure
2. Environmental Quality and Pollutant Discharge Standard
3. Hazardous Solid Wastes Disposal
iv. Logistics
1. General Condition
2. Civil Aviation
3. Railway Transportation
4. Highway Transport
5. River Transport
6. Export Processing Zone
7. Chengdu Bonded Logistics Center
8. Customs Declaration and Quarantine
III. Planning of Industrial Development
i. Industrial Policies
ii. Industrial Planning
iii. One-District One-Owner
1. One-District One-Owner
2. Introduction of Carrier
IV. Impacts of 5.12 Wenchuan Earthquake on Industries in Chengdu
i. Impacts of Wenchuan Earthquake on Chengdu
ii. Impacts of Wenchuan Earthquake on Chengdu’s Electronic Information Industry
I. Industrial Status Quo
i. Industrial Basis
In 2007, total income of Chengdu electronic information manufacturing industry was RMB 42.7 billion (see Table 1.1.1), and one enterprise was ranked among China Top 100 Electronic Information Enterprises.
Type / Total amount (unit: RMB 100 million) / Year-on-year growth / Proportion in city’s industrySales revenue / 427.09 / 39.35%
Total investment of fixed assets / 119.56 / 51.6% / 16%
Accomplished industrial added value above scale / 163.56 / 36.1% / 16.7%
Accomplished main business income / 427.09 / 36.8% / 15.2%
Tax paid / 50.05 / 25.13% / 16.2%
Profit gained / 38.13 / 17.11% / 21.3%
Table 1.1.1 Economic Indexes of Electronic Information Manufacturing Industry
Chengdu software and information service industry achieved the business income of RMB 31 billion, increased by 50.3％ on year-on-year basis, and software export amount was up to USD 160 million, increased by 41.8% on year-on-year basis, which enabled the indexes of software industry in Sichuan Province ascended to the rank 7th from the 11th in 2006 in the country. The sales revenues of 6 software enterprises broke through RMB 1 billion, and 5 enterprises became key software enterprises in national planning. There are 503 certified software enterprises in Chengdu, and 16 have passed CMM/CMMI Grade III and above level accreditation. Software practitioners exceed 100,000 in number.
ii. Status of Industry Chain
1. Integrated Circuit Industry
The industry chain of integrated circuit centered on IC R&D design “raw material development— R&D, design —IC manufacture —packaging and testing—services—IC products and application” has been basically formed. As of the end of 2007, the total investment for integrated circuit industry exceeded USD 1.5 billion and the production value exceeded RMB 1.66 billion. (See Table 1.2.1)
Industry chain / Local status and trend / Local representatives / Domestically and internationally famous enterprisesRaw material development / Semiconductor has advantages in the raw material silicon, and polycrystalline silicon development enterprises are the key cultivation targets / Xinguang Silicon, CICO / Intel, AMD, SAMSUNG, Toshiba, TI, ST , Infineon, Renesas, NXP, NEC, etc (the above mentioned 5 enterprises have entered into Chengdu) Shenzhen Segem, Norcent, Shanghai Huahong, Shijiazhuang Jinglong, Beijing Daheng New Epoch, Zhenhua Electronics, China Resources Microelectronics, Jiangsu Xinchao, Jiangxi Electronics Group, Nantong Fujitsu, etc (the abovementioned 2 enterprises have moved into Chengdu)
R&D
design / National integrated circuit design industrialization base, enhancing information security for self-owned intellectual properties, and design and development of special and general integrated circuit chips for cyber communications, digital television, intelligent home appliances, IC card, mobile communication / Conexant, Fujitsu, Freescale, Overtop , O2, Sonix, Hua Wei, NSBIC, West Star, Panovasic, IPGoal, Guoteng, Rockship, Skytek, Dexie (over 50 enterprises)
IC manufacture / Put emphasis on developing 8-12 inches monocrystalline silicon, polycrystalline silicon and epitaxial wafer / Cension (63,000 chips/month, width of wire 0.35-0.11 micrometer)
Packaging and testing / Accelerate the construction paces of key enterprises’ projects and achieve the production capacity as soon as possible / Intel, SMIC, Unisem, Xinyuan, Kewei Electronics, Phoenix, ZETEX
Service / Gradually form the capacity in supporting equipment, material, chemical agents, etc / ULVAC, Sumiko, Linde, Air Products and Chemicals, Air Liquide, Messer, Emei Semiconductors, CREDEN
IC products and application / Initiatively promote the development of downstream applicable products of integrated circuits such consumption electronic and terminal products / Agilent, Nokia, Ericsson, Motorola, Alcatel, Flextronics, Changhong, TCL, Maipu, Jiuzhou, Guoteng, Da Tang, BOE, HUAWEI, Lenovo, China Wireless
Table 1.2.1 Industry Chain Representatives
Some of foreign investment enterprises listed as following:
(1) IC design companies (Detailed in Table 1.2.11)
Company / Business Domain / TechnologySino-Microelectronics / Design, development and testing of computer, communication, integrated circuit products in consuming electronics domain / Over 0.18 m
Guoteng Micro-Electronics / Digital signal processing, standard bus interface, communication protocols, chips for encoding and decoding, power management, phase locking loop, operational amplifier, filter, D/A mixing integrated circuit / 0.25 m
Fujitsu Chip / Chips for digital image processing. LT1115 digital image processing chip has marketed for low-cost and high-resolution TV. / 0.25m - 0.18 m
Freescale / Research & development of RF and DSP / Over 0.45 nm
Conexant Chengdu Company / Applications, e.g. broadband communication, enterprise network and digitalized home / 90 nm
NanShanBridge Micro-electronics / The key chip technology, complete workflow of back-end design for deep sub-micron chip, and advanced simulation verification methodology are mastered, along with the design ability for customized SoC, Ethernet router and chip for switch system. / 0.11-0.18 m
Sunplus Technology / The company engages mainly in the design, development, testing and marketing of ASIC products and IC for LCD, remote controller, multi-media, audio and music, with high added-value, as well as hardware products for embedded system, system software products and digital gaming products. / 0.35-0.18m
Panovasic Technology / A high-tech company engages in design for VISC and software research & development in the area of computer, telecommunication and home appliances (3C) , combining together with corresponding marketing and services. / 90nm – 0.25m
Sonix Technology / Design and development of software products for embedded system, multi-media imaging, video and audio processing, system software tools, Windows application software, and software products for Embedded Linux. / 0.35-0.11m
Table 1.2.1.1 IC design companies
(1)Wafer fabrication and assembly & test company(Detailed in Table 1.2.1.2)
Company / Business domain / Production value/Production capacityCension / With the total investment of 7.06 billionsUSD, the company has the monthly production capacity of 630,000 pieces requiring line width of 0.35 – 0.11 m. Its main products are memory products, CMOS imaging components, LCD driver and power supply IC. / Cension
Leshan–Phoenix Semiconductor Co. Ltd. / Jointly invested by ON Semiconductor, Leshan Wireless Co. Ltd and Motorola, the company has 14 of SOT23 production lines and has become the largest SOT23 producer with the lowest cost in the world. There is a production line of 6 inches power discrete components. / Annual production value of 11 billions RMB
Intel / With the total investment of 5.25 billions USD, the company assembles and test flash memory, chipsets and the most advanced duo core processor. The exportation value in 2007 was as high as 10 billions USD.
Semiconductor Manufacturing International / With the total investment of 1.75 billions USD, the company assembles and tests storage memory and logic chips with the annual production of 4.32 pieces. It currently has 1200 employees. The annual production value in 2007 was 2.5 billions RMB, / Annual production of 4.32 billions pieces
Unisem / With the total investment of 2.1 billions USD, the company engages in the inspection, assembly, and IC test of wafer and lead-frame, and produces the high-end products like BGA, SLP, TSSOP, SOIC, etc. It currently has 1000 employees. The production value in 2007 was 10 millions USD.
Chengdu MPS / With the total investment of 12 millions USD, the company is undergoing the test of simulated power IC products and is going to increase the total investment to 50 millions USD.
Zetex (Chengdu) Electronics Co. Ltd / Jointly invested by Chengdu Yaguang Electronics Co. Ltd and UK Zetex company, the company mainly produces SMT components. / Annual production of 3 billions pieces.
HK Forward Holdings LTD / With the total investment of 1 billion USD, the company assembles and tests the semiconductor discrete components.
Table 1.2.1.2 Productionn and assembly & test companies
(1) Raw material and accessory companies (Table 1.2.1.3)
Company / Business domainXinguang Silicon / Xinguang Silicon is the first polycrystalline silicon producer in large scale in China with the annual production of 800 tons of polycrystalline silicon. The company is going to establish a polycrystalline technology center and polycrystalline deep-processing base (Mono-crystalline pulling and slicing factory with the annual production of 300 tons of mono-crystalline slices) in the High-New District.
Chaolei Industrial Corporation / The company produces polycrystalline and mono-crystalline silicon. The first phase of the construction was in July, 2007. It is planned to actualize the planned production capacity in 5 years with the total investment of 38 billions RMB.
Ulvac / Jointly invested by Chengdu Oriental Equipment Co. Ltd and ULVAC, the company engages in the equipment production, like helium recovery and leakage detection, leakage detection for vacuum cases, refrigerant charging machine, refrigerant recovery, and evaporation coating. It currently has 250 employees. The sales income was 60 millions RMB in 2007 and will be 3 billions in 2011 occupying more than 80% of the domestic market.
Ultra-pak Electronics / The company produces the packaging materials for electronics with the annual sales volume of 5 millions USD.
Linde Gas / The largest industrial gas producer in the world. With the investment of respectively 5 millions and 15.5 millions USD in the High-new District, two sole proprietorship corporations are set up to provide highly pure industrial gases like hydrogen, nitrogen, radon and helium for Semiconductor Manufacturing International and Alltech Medical. The two corporations will be fully completed in 2008 and actualize the sales income of 1.5 billions.
Messer / The total investment of 12 millions USD is solely invested by Germany Messer Group to set up a gas production base to provide the highly pure industrial gases, like oxygen, hydrogen, helium, radon, nitrogen, argon and electronic gas, and ancillary services for Intel, etc. It currently has 40 employees.
Sumiko Electronics / With over 30 millions USD of total investment, the company produces semiconductor lead-frames and mainly provides ancillary services for Leshan On. It currently has 400 employees. The sales income in 2007 was 3 billions.
Table 1.2.1.3 Raw material and accessory companies
2. Flat panel display industry
The flat panel display industry chain centering aroundterminal products production - “Materials and accessories – cell and module –producing terminal products as a whole”, is the newly rising industrial cluster in Chengdu (Detailed as in Table 1.2.2).
Industry chain / Current local status / Local representative enterprises / Home and abroad well-known enterprisesRaw materials and accessories / The key development involves in glass substrate, color optical filer, drive IC, optical film, polarizer, PDP protection screen, TV protection screen, touch screen and relating equipment manufacturing. / TG Chengdu Co.Ltd, CommUnitex Glass（Chengdu） Co. Ltd,CSG Chengdu Industrial Base, ChengDu GuangMing Optoelectronic Information Material Co., Ltd. / American Corning,Asahi Glass, NEG, NSG, Toppan Printing, Dai Nippon Printing, Fujitsu, Taiwan Sintek, Taiwan Novatek, HK Solomon Systech , 3M, LG Chemical, Canon, Nicon, Yongsheng Huatsing, Rainbow,Hisense, BOE Chatani
Cell & Module / The key is to introduce and develop TFT-LCD, OLED and module production line to gradually form an aggregation of advantageous enterprises. / TFT-LCD of BOE, TFT-LCD of Shenzheng Tianma, OLED of Changhong, LCD module of TSMT, TFT-LCD module of Chengdu Space Photo-electronics / Sharp, Samsung, Lejin-Philip, Taiwan AUO, Chi Mei, Chunghwa Picture Tubes, BOE Sci&Tech Group, SVA-NEC, Longteng Optic-electronics (Kunshan), Shanghai Tianma, Truly, Shenzheng Laibao
Production of Terminal Products as a whole / High-end LCD TV production center shall be attracted to shift toward Chengdu. Production of Terminal products like mobile shall be positively developed. / TCL, Changhong, Chengdu General Touch, Sichuan Direction Photo-electronics, communication manufacturing enterprises, instrument producing factories / Philip, LG, Sharp, Panasonic, Samsung, Sony, Hitachi, Fujitsu, AOC, Hair, Hisense, Changhong, TCL, Skyworth, Konka, XOCECO
Table 1.2.2 Representative companies of industry chain
Some of the raw material supplier and foreign investment enterprises listed as following:
(1) Up-chain raw material supplier (Table 1.2.2.1)
Raw material Name / Specification / SupplierSiO2 (high purity) / Purity≥99.8％、granularity 60～200 meshes / Sichuan Chongzhou Taichang Quartz Sand Factory
H3BO3 / Purity≥99.66％ / Chengdu Shuyang Boron Chemical Co. Ltd
AI2O3 / Purity≥99.5％、granularity 100～300 meshes / Xian Special Fire Resistant Material Factory
BaCO3 / Purity≥99.8％ / Guizhou Red Star Development Co. Ltd
Hebei Xinji Chemical Factory
Ba(NO)2 / Purity≥99.8％ / Qingdao Red Star Chemical Factory
As2O3 / Purity≥99.％ / Yunnan Wenshan Arsenic Factory
Sb2O3 / Purity≥99.9％ / Lengshuijiang Tin Minign Bureau
Table 1.2.2.1 Up-chain material suppliers of LCD glass in and nearby Chengdu
(2) Up-chain Enterprises (Table 1.2.2.2)
Company / Business domainChengdu Sanli Yazhong Porcelain Co., Ltd / PDP Optical Filter producer has the production capacity of 400K and now its production and sales are less than 200K. The planned scale of production capacity will be 4KK in 2012 and 6KK in 2017.
TG Chengdu Co.Ltd / With the total investment of 65 millions USD, the company located in Qingbaijiang district of Chengdu, mainly produces high-quality floating glass and glass deep-processing
CommUnitex Glass（Chengdu） Co. Ltd / Jointly ventured by Chengdu Glass Factory and CommUnitex (Xiamen) Co. Ltd of Intex Group, the company is the largest one for flat panel glass production and glass deep-processing in Southwest China. The main products are floating glass, deep-processed products and high-quality quartz sand products.
CSG Chengdu Industrial Base / It is to develop and produce various special glass and do glass deep-processing.
ChengDu GuangMing Optoelectronic Information Material Co., Ltd / The company was founded in 1956 and mainly engages in production, research and selling of optical and photo-electronics materials. One of its products is the basic materials for TFT-LCD and LED, GD1 non-alkali precision glass substrate widely applied in laptops, e-maps, video phones and DV screens, etc. It has 1700 employees, among which there are 71 high-level technicians and administrators, and 9 senior engineers at the grade of researcher..
Table 1.2.2.2 Glass enterprises
(3) Mid and down chain enterprises (Table 1.2.2.3)
Company / Business DomainBOE TFT-LCD / With the total investment of 31 billions RMB, the company has a 4.5th generation of TFT-LCD production line requiring 730mmX920mm glass substrates, with monthly production capacity of 30,000 pieces (Designed monthly production capacity of 45,000 pieces, built-in CF). The products are small size display panels (screens) and modules. The company has started its construction in March, 2008 and is expected to produce in Sep., 2009. (Monthly demanding quantity of glass substrates will be 90,000 pieces in its full production capacity.)
Shenzheng Tianma TFT-LCD / With the total investment of 31 billions RMB, a 4.5th generation of TFT-LCD production line (CF excluded) requiring 730mmX920mm glass substrates is established in Chengdu. The agreement of the project has been signed in July, 2008 and the project is expected to produce in 2010. (Monthly demanding quantity of glass substrates will be 30,000 pieces in its full production capacity.)
Changhong OLED / There is a newly built product base of 12 millions pieces (equivalent to 1 inch screen) of 1-3.5 inches passive OLED display screens and modules. Meanwhile, the research and development of positive OLED products is undergoing. A research and production base for portable display terminals of HMD (50,000 per year) and mobile TV (1.5 millions per year) will be constructed. The volume production will start in 2009 and the annul sales income will be expected to be 5 billions RMB.
TSMT LCD Module / New type of flat panel displays, thin-coating LCD modules, CD driver and its components of large capacity, connectors for instrument and mobile related components are produced and processed. With the total investment of 50 millions USD, its annual production is 12 millions pieces with annual production value of 60 millions USD.
Space Photo-electronics TFT-LCD Module Production / Middle and small size TFT-LCD screens are researched and developed, mainly applied in mobiles and digital cameras. The company currently has 400 employees and its annual production value is over 1 billion RMB.
TCL (Chengdu) Digital Industry Park / The first phase of TCL (Chengdu) Digital Industry Park established by TCL (Chengdu) Co. Ltd has started its production in Sep., 2005, mainly producing digital high-resolution TV. There were 20,000 of CRTs produced in 2007 realizing the annual sales volume of 5.5 billions.
Chengdu General Touch Technology Co. Ltd / The company engages in the research and production of touch screens and the relating products. It is the second producer in the world that owns the key technology of surface acoustic wave touch screen. The company currently has 300 employees with the annual sales income of approximately 1 billion RMB that will be 5 billions when in its full production capacity.
Sichuan Direction Photo-electronics Co. Ltd. / The company engages in the production of TFT-LCD and CRT. The products are mainly for exportation, of which 90% are marketed in Europe, America and far east countries and regions.
Communication enterprises / For example, Chengdu Guoteng Telecommunication (Group) Co. Ltd involves in the business including telecommunication, electricity, financial and taxation devices, satellite communication, IC design, intellectual card, large software development, information network security, intellectualized network construction and education, etc. The terminal products in those areas require LCDs.
Instrument producing factories / There are many instrument production factories in Sichuan. It is reflected from LCD product chain that some instrument panels require LCD too.
Table 1.2.3.3 Middle and down chain enterprises