CCID Consulting Forecasts IP Core Will Be an Opportunity for China's Chip Design Industry

BEIJING -- July 20, 2007 -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), forecasts that IP core will be an opportunity for China's chip design industry.

CCID believes that there are four main reasons why using commercial IP (Silicon Intellectual Property) to design large-scale complex systems is an opportunity for China's chip design industry to achieve key developments.

First, IP core trading has become a shortcut for IC design enterprises to speed up their product R&D process and improve product quality. Second, IP reuse technology has a bright future, and has drawn attention from IC design enterprises. Third, IP core has become an important intellectual property for IC design enterprises. And finally, there are many OEM factories in China that provide a resource assurance for promoting the national IP core standard and reuse.

China has attached high importance to the SOC/IP industry. In 2002, the Ministry of Information Industry set up a Working Group for Integrated Circuit IP Core (IPCG). In 2004, the national IP bank, which CSIP had prepared, was formally established, and started to provide services to IC/SOC design firms and manufactures. Launched by 8 units, including the Ministry of Information Industry Software and Integrated Circuit Promotion Center (CSIP), the China Silicon Intellectual Property Industry Alliance ("China IP Alliance") was formally established in Beijing in August 2005.

In recent years, China's electronic information manufacturing industry has been expanding. Strong market demand has pushed forward the development of China's IC industry. Using commercial IP to concurrently develop the IP industry is an important opportunity for China's IC industry to come into terms with the world.

Despite rapid industry growth, China has actually grasped very few core technologies. To turn market advantages into technological leadership, it should be possible for the country to make breakthroughs in the design industry, particularly the IP core field.

CCID Consulting's data shows that 18% of the IP core products purchased in China now come from overseas OEM factories, with 29% from domestic OEM factories, 35% from overseas IP suppliers and 11% from domestic IP suppliers. Only 7% are shared exchange IP cores. It can be seen that local IP is far from meeting China's domestic demand.

China's IP industry started rather late. It is small in size. The IP core industry has such problems as small design varieties and few verified IPs. These form the bottlenecks for SOC design and industrialization.

So far, there are only a very small number of companies in China which purely rely on IP operations. Most companies are extremely cautious about entering the IP industry. Often, they operate ASIC, IP and design services at the same time. Domestic IP and SOC enterprises such as Nanshan Bridge, C*Core Technology (Suzhou), BLX IC Design and IPGoal Microelectronics are the first group of companies with IP as their development direction. They are now in a start-up phase.

Currently, there are already some cases of successful applications of IP cores in China: the Shanghai Fullhan H.264 HD decoder IP core has its authorization purchased by internationally recognized chip design companies, setting a precedent for a Chinese start-up company making authorizations to big foreign companies.

About CCID Consulting

CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas of powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.

CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://en.ccidconsulting.com/.