China’s multi-billion dollar drive towards self-reliance in semiconductors has spawned a cluster of chip designers that industry experts say could eventually rival leaders Qualcomm Inc (QCOM.O) and MediaTek Inc (2454.TW).
The world’s second-largest economy now boasts nine companies that design and sell chips in the global top 50 from just one in 2009. Clients such as Chinese smartphone manufacturers have also helped compatriot chip designers amass a market share of almost a fifth, according to data analyst TrendForce.
The rise of Chinese designers such as Huawei Technologies Co Ltd [HWT.UL] subsidiary HiSilicon and Spreadtrum Communications comes as the government ploughs funds into home-grown technology to reduce cyber-security risk, following revelations in 2013 of U.S. global cyber-snooping programs.
The revelations have made China a harder place for U.S. tech firms to do business, with Qualcomm saying as recently as last month that it faced delays closing licensing agreements. In contrast, sales at Chinese designers are set to surge this year, some by as much as 40 percent, said researcher IC Insights.