Implementing a Successful Business Model for the IC Industry in China

The global IC industry has undergone tremendous changes in the past ten years. Traditionally, the IC design industry is dominated by the North America with big companies doing vertical integration. The development of the foundry business model enables many new IC design house to develop their products at significantly reduced cost. This trend allows many new comers to start business in IC design, and in this time of rapid changes, new leaders have emerged. The globalization of the economy has generally made the labor cost to do IC design in the North America very high. With the availability of high end foundries in the Asia area, the IC design industry in the region is booming, taking the advantages of lower local wages and more returnee from North America bringing in their expertise in IC design. Among the Asian countries, China shows very high potential to be one of the leaders with the supply of low cost local talents, large domestic market and underdeveloped economy. However, doing IC design business in China also involve risks and challenges significantly different from that in North America. With proper understanding, planning, investment, and implementation, there is a good chance that a successful business in IC design can be created. With the experience of funding and incubating startup IC design houses in China, I´ll describe and analyze the possible implementation of a successful IC design business in China.