(Yicai Global) Sept. 15 -- A boom may be brewing for China's semiconductor sector.
"I would say that it is time for China's semiconductor industry to flourish," Qualcomm China Chairman Meng Pu told Yicai Global. "In the next three decades, there will be abundant work [for China's semiconductor industry], so actions will be better than words."
"The semiconductor industry needs massive capital investment," Meng said. "The establishment of large state funds and the involvement of private funds in recent years indicate substantive development in the industrial. Qualcomm also sees the trend and wants to be involved."
In China, Qualcomm has to be involved on the front end and in the middle stage simultaneously, so the group invested in many areas in the country, he said. Foreign markets are relatively mature, with a more rigorous division of labor, so Qualcomm does not need to be involved in many stages abroad.
"The investments include the wafer production in the front end, in which we have cooperation with Semiconductor Manufacturing International Corp. [HK:0981] (SMIC); the investment in the middle stage of the production, such as in SJ Semiconductor Corp. (SJSEMI); and the investment in back-end testing," Meng said. "Last year, Qualcomm set up a solely owned company in Shanghai, in hopes of improving back-end testing capabilities."
Qualcomm has been doing research in the field of artificial intelligence, he said. Meng prefers to call AI "machine learning." For power consumption, a machine is able to "learn" user habits to perform as if it is intelligent.
"[China's mobile phone sector] will be a world-class industry," said Meng. "It is now hard to say whether there will be five or seven major players and whether they can take the place of Apple Inc. [NASDAQ:AAPL] is up to the market."
Chinese companies are making more innovative intelligent hardware and software than they used to, he said. As long as there is an environment for innovation, such companies will be there to rise, he said.
Looking at an industry's development trend to see if the market can provide companies a favorable business environment and innovation incentives can be very telling, Meng said. With both these, more achievements will be possible, attracting human and capital resources, he said.