Up to the end of 2004, the total intellectual properties of integrated circuit all over the world had amounted to 1.02 million, in which the total number of patents applied by the enterprises in Mainland China was only 4791, accounting for 0.4 percent in the world. We have to think over the independent innovation of the industry from a new angle due to the present competition confronting China's integrated circuits industry.

An important R&D Organizational Pattern

R&D is the source of innovation. But the success of R&D is influenced by many factors, including the selection of personnel and technical routes, the level and time of investment, the organizational pattern and stimulating mechanism of R&D group, etc, in which the organizational pattern is extremely important.

The pre-production R&D alliance is defined as the "pre-competition research" made by the industries in the established alliance base in order to integrate R&D resources. Pre-competition research is aimed at creating transferable knowledge (preliminary knowledge), which cannot be applied in the form of market transaction. But the alliance members can commercialize the knowledge as a new product and a new craft, and then the post-production competition of enterprises comes into being. Remarkably, the pre-production alliance has a comparatively upper hand than the independent research and development of an individual enterprise in organizing the application and development of the industry's big-production techniques.

How is a successful pre-production alliance like?

The comparative advantage of pre-production alliance has drawn extensive attention from the economics and industrial circles. Economists argued that, as for the R&D activities of big-production techniques, the social welfare created under pre-production alliance mode is much more than that produced by the independent research of enterprises.

Then what terms and conditions are required to build a successful pre-production alliance?

The first is to build an "allied pre-production R&D center", namely the "cooperative research and development platform" mentioned above. It can enable the R&D activities of the alliance to get rid of the restriction of supporters and to take the development of the whole industry as the alliance's own responsibility. What's more important, it can fully reduce the geographical distance between R&D personnel and enhance the implicit knowledge communication of R&D personnel of different enterprises.

Secondly, the participators should designate excellent personnel to engage in the R&D. Unclassified technique is generally the explicit knowledge, which can take patent as its carrier. While, the core technique is usually implicit knowledge, taking outstanding R&D personnel as its carrier; technique comes with the personnel, so only excellent personnel can bring about abundant technical spillover.

The third is to create a climate and environment favorable for communication. Communication needs guiding. The founder of the US Semiconductor Industry Association had taken a variety of measures to stimulate the communications of his staff. Then the association began to get on the right track of "open knowledge". This effort had contributed a lot to the success of the US Semiconductor Industry Association.

The fourth is to trace out a good "technical blueprint". Two hundred and forty scientists and engineers from the industrial community, academic circles, government and national laboratory schemed the 1994 technical blueprint of the US Semiconductor Industry Association out. Therefore, an authoritative technical blueprint played an important role in using the resource effectively, preventing the market from excessive competition and avoiding the far superior of researches.

It's the right time to build pre-production alliance for integrated circuit

According to above considerations, we reckon that it will be helpful for the great-leap-forward development of China's integrated circuit industry to build a pre-production alliance.

Firstly, the building of pre-production alliance is beneficial to find an optimal technical route for China's integrated circuit. The history of industrial technology shows that, there is really an "optimal technical route" for every industry. Enterprises that are involved in the pre-production alliance will approach to the optimal technical route by following their common technical routes, while the others are fluctuating randomly surrounding the optimal industrial technical route, and leading to repeated R&D and waste of resources.

Secondly, it will be helpful to provide more patents for the industry and to protect these patents by building a pre-production alliance.

Up to the end of 2004, the total number of intellectual properties in the world integrated circuit was 1,024,227. However, enterprises in Mainland China applied only 4791 patents, accounting for 0.4 percent of the total patents worldwide. The most serious bottleneck restricting the development of China's integrated circuit industry is the lack of independent intellectual property. Economists made a survey on the performances of 145 R&D alliances of Japan during the 14 years between 1980 and 1994, which were sponsored by the government; the outcome indicates that it is fairly good to improve the intellectual property by participating in the alliances.

It is not enough to protect intellectual property only by the government laws. The laws have only provided an incomplete protection for the intellectual property, for the startling similarity of information makes it rather difficult for us to give a clear definition as well as offer a thorough protection to a piece of information. Pre-production alliance is significant for participators to provide a protective device for patents nowadays, when the intellectual property disputes are increasingly prominent.

Thirdly, it will be helpful for setting up a standard for China's integrated circuit industry by building pre-production alliance. It's a pretty good opportunity for China to develop System-On-Chip at present. One of the important supporting techniques of SOC is IP Warehouse, in which a lot of standards need building. We can repeatedly use the modules with intellectual properties that have been validated and optimized after the IP Warehouse is built. To build a nationwide IP Warehouse based on the pre-production alliance of China's integrated circuit industry is of great importance for the whole integrated circuit industry of China.

Relevant universities, scientific research institutions, integrated circuit designers, processing factories and encapsulating workshop of China should embark on constructing "Pre-production Alliance of China's Integrated Circuit Industry". The upper stream of the alliance consists of universities and scientific research institutions. The role of pre-production alliance is to transform the basic research into big-production technique that is facing lower stream integrated circuit enterprises.

Economist pointed out that the lowest level of competition is price competition, while the highest is "new organization pattern competition". Report on the development of China's Integrated Circuit Enterprises and the IP Status in 2004 pointed out that most integrated circuit enterprises of China still remained at the level of price competition. The building of pre-production alliance for China's integrated circuit industry is to give a hand for the industry to break away from the low-level price competition, to compete with the world integrated circuit industry in "new organization pattern competition", and to dedicate to constructing a new pattern country.

Editor: Yan