Shanghai firms chip away at their rival foreign giants

CHIPS are often called the brains of the information technology industry, but most made-in-China electronics are installed with imported chips.

However, Shanghai-based chip design houses are gearing up to directly challenge their overseas rivals. Among them, the cleverest "brains" are the managers of Spreadtrum Communications Inc, Telegent Systems (Shanghai) and Shanghai Jade Technologies.

"Shanghai-based designers excel in the convergence of research and industrialization and they are not like many 'scholar' firms in Beijing," said Li Ke, a semiconductor analyst at Beijing-based CCID Consulting, a research firm.

Spreadtrum, which listed on Nasdaq in June, expanded market share in second-generation handset chips and has invested heavily on the coming third-generation (3G) chips in China.

"The (Spreadtrum) chip solution is the first time China has owned a core patent in the communications chip sector," said Wu Ping, Spreadtrum's chief executive.

The company integrated multimedia and communications functions into one chip, while foreign rivals use two.

The company has surpassed Philips and Infineon in the domestic market and will win more market share in the homegrown 3G market, Wu predicted.

Wang Hanqing, the general manager of Telegent Systems Shanghai, has a vision to make 500 million Chinese mobile handsets to watch the Beijing Olympic Games in 2008.

The company has developed a chip with radio and TV program receivers and a decoding system, which allows users to watch local TV channels even while in another city. The service is free.

The company has cooperated with handset makers, including ZTE and Skyworth, to launch more than 50 TV phone models nationwide.

"It's also good news for TV advertisers as they can reach mobile phone users now," said Wang.

Jade Technologies has recently launched an X900 chip with sophisticated H.264 MP4 high-definition real-time hardware encoder technology, allowing users to play high-definition video on a portable device.

"It is a remarkable day as now we stand in the same line with the foreign chip giants," said Ouyang He, Jade's chief executive and founder.

Jade also provides chips and software to handheld information terminals, home security monitors, smart phones and IPTV firms.