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<p>In the long run, increasing costs result in plant shutdowns, as seen over the past three years, Zelayeta said.</p>

The vendors who are now adopting Linux said times are changing. EDA on Linux has become considerably easier, they said, due to commercial support from Red Hat Software Inc.; availability of ancillary products, such as debuggers, under Linux; and the desire of some customers to plug PC hardware into existing Unix networks.

Other companies also have parameterized cores, although they usually don't have such graphical user interfaces. ISS Ltd. (Belfast, Northern Ireland) offers DSP cores for license and Synopsys Inc. (Mountain View, Calif.) has a parameterized PCIbus. Both had booths at the exhibition associated with the IP98-Europe conference.

However, the use of compilers with graphical user interfaces was not seen as a universal solution to block-level design and manipulation.

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Yatin Trivedi, principal with EDA consultancy Seva (Fremont, Calif.) said that such techniques, while useful, tend to be retrospective; that is, they apply to a set of functions and blocks that have already been characterized and supported. The engineer will always want some block or option that has not been built into the GUI,” said Trivedi.

BEIJING — The essential underpinnings of a world-class electronics industry are emerging in China, driven by a huge consumer market and an insatiable hunger for technical know-how. Market-oriented government leaders and a new cadre of technocrats here hope to forge an indigenous design capability that would complement the nation's growing consumer-electronics industry and allow it to create and hold the intellectual property that is the coin of the realm in the Information Age.

From an ambitious IC-design effort to a handful of standardization projects that will compel foreign electronics manufacturers to design to Chinese specifications, the government and its far-flung institutes and state-owned enterprises are working on several fronts to build what could be the world's next great technological power.

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For now, however, China and its technology planners find themselves playing catch-up. An Asian design engineer who works in bustling Shenzhen, one of China's special economic development zones, said China is at least a decade behind the rest of the world in its IC- and system-design capabilities.

The Chinese have to start designing their own stuff,” said Andrew Chen, managing director of Shanghai Nortel Semiconductor. The rub is that people here do not know how to design products with market appeal.”

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Another question mark is the underlying strength of the Chinese economy and whether it will be spared the disastrous effects of the Asian economic crisis. Many sectors of the economy are suffering and unemployment is up, yet China is still registering 7.6 percent annual growth. Foreign investment has slowed considerably, but capital investment from neighboring electronics giant Taiwan remains relatively strong, observers said.

Whatever their direction, events in China promise to reshape the global electronics industry over the next decade and beyond.

Secondly, the government should set up a large-scale R&D center that will cultivate new technologies, coordinate with smaller R&D labs and draw in overseas investment. As part of this strategy, the government should make it easier for private companies to receive subsidies and grants.

Hong Kong must also try to retain graduates from its schools like the University of Science & Technology by providing more domestic career opportunities. It should also revise immigration laws to allow more engineers from China and elsewhere to work in Hong Kong. Lui said Taiwan's Hsinchu Science Park, which contains 245 technology companies with 64,000 employees, is a good example of how government and private industry can work together to attract skilled workers.

To be sure, the Hong Kong government in recent years has set up a fund for universities, a joint R&D funding mechanism with China and has made investments in a high-tech business park, he said. But it's still a long way from adopting a comprehensive industrial policy for high-tech industries, he said.

Finally, Hong Kong has to recognize that high-tech is a special industry that is expensive, risky and often does not promise a quick return on investment. Today, banks and venture capital firms are often only willing to back sure things with concrete collateral. But its vital that government and private investment firms see long-term benefits of such projects.

Building a new airport, and underground transit railway system, vast expansion of the container port and other mammoth projects also involve huge capital, are risky and have long ROIs,” he said. Yet the government still makes these investments because they are obliged to build infrastructure for future generations.

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Zelayeta called for smarter fab features that would translate into smarter investment, and chided the industry for not having learned a lesson in the past three years. With 14 semiconductor companies closing plants in various regions of the world over that time, including Cirrus Logic Inc., Motorola Inc., Texas Instruments Inc., and even LSI Logic, Zelayeta said the industry needs to rethink its global manufacturing strategies if it is to successfully process 30,000 eight-inch wafers per month next year in 0.25-micron process technologies.

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