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<p>Hard costs are reduced, such as inventory, for those customers requesting services such as bonded inventory or order replenishment, where components are shipped directly from suppliers. Avnet will handle services through this division at a price, but it will reduce overhead costs by eliminating the need for physically buying inventory, analysts said.</p>

An SoC is first described using Fvcores. Then a top-level architecture is automatically generated from the system function chart. The architecture includes both hardware and software. By optimizing the architecture, Svcores and Hvcores are generated. Hvcores are ultimately passed to the RTL synthesis process.

The Big Fund is said to allocate more than 70 percent of its money for chip manufacturing (wafers and backend) while the rest goes to chip design.

Most global chip companies have already opted for a fab lite model. So why would China insist on semiconductor manufacturing? Prof. Wei explains that China continues to worry about the huge gap between the production and consumption of semiconductors in China.

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In 2013, for example, China imported about $200 billion in semiconductors, while domestically made ICs represented only $40 billion. The rise of fabless chip companies like Spreadtrum Communications could help close the gap. But in reality, the turnaround will take time. Meanwhile, demand for smartphones and wearable devices will continue to drive growth in China’s domestic market.

Prof. Wei was careful not to talk about any specific category of products or foundries the Big Fund plans to underwrite for chip production. But industry observers are putting their money on memory production in China. 

Allen Lu, president of SEMI China, told EE Times during a reception at the CES Asia in Shanghai that he doesn’t have specific knowledge about memory production plans.  However, he said, It makes sense.  It takes a lot of money – the Big Fund is perfect for that – and every system needs memory.  There is also a growing demand for chips integrated with memory.”

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In its early years, the Shanghai-based Semiconductor Manufacturing International Corp. (SMIC) made memory chips but eventually had to mothball a money losing operation. It was never able to compete on the global market.

XMC in Wuhan is the only Chinese foundry currently engaged in memory production. It’s been producing NOR chips for Spansion (now a part of Cypress Semiconductor). Early this year, it partnered with Spansion to develop 3D NAND.  XMC also makes Nor flash for Beijing-based GigaDevice.

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But if China ever gets back into memory, it’d better have a strategic relationship with a big IDM (integrated device manufacturer) who makes memory chips, said Lu.

Samsung Electronics, a global leader in memory semiconductor technology, could be an ideal candidate. About a year ago, the Korean behemoth announced that its memory fabrication line in Xi’an, China began full-scale manufacturing. At the new facility, Samsung is making advanced NAND flash memory chips. But Leo Li, CEO of Spreadtrum, was dubious. Samsung is known to be extremely secretive as to its memory production operation in Xi’an. I can’t imagine Samsung working with any partner in the future.”

Behrooz Zahiri is Vice President of Marketing at Averant Inc. (Sunnyvale, Calif.).

Industry bodies have come down against the government's preferred scheme for extending R&D tax credits to all companies. And they say the definition of R&D needs to be reviewed, otherwise extending relief will have little effect.

The Federation of the Electronics Industry (FEI), which made its submission to the Treasury public this week, and the Confederation of British Industry (CBI), which will not publish its submission until week beginning 18 June — but which Electronics Times has obtained a copy of — are arguing against an incremental scheme, which gives tax relief in proportion to the amount by which a company increases R&D in a year.

Instead the FEI and the CBI favour a volume scheme, which rewards all R&D expenditure.

The government proposed in March's Budget to extend R&D tax credits to all companies — not just SMEs.