Hisense Achieve Significant Breakthrough for Core Technology Through Independent Innovation

Hisense Achieve Significant Breakthrough for Core Technology Through Independent Innovation

75 Million Color TVs Produced Each Year in China Will Have Their Homemade Chips

Core Technology Problem That Long Puzzled the Color TV Industry of China Resolved By Hisense

BEIJING, June 28 /Xinhua-PRNewswire/ -- Hisense Group announces that its digital video media processing chip, a high-definition and high vision chip with core technology independently developed by Hisense, and its application have successfully passed the authoritative appraisal organized by the Ministry of Information Industry (MII) at present. On June 26, Hisense Group officially announced this significant achievement known as ''the first China-made chip for our color TV'' in Beijing. Lou Qinjian, MII vice minister, and others attended the press conference in a high-key manner, fully affirming Hisense's achievement and described this chip as the first of its kind developed by Chinese which has been successfully industrialized in the audio and video industry of China.

According to the expert assessment, this chip entitled ''Hiview'' has reached the world leading level in the field of structural design, key arithmetic design and etc. It will be applied on digital high-definition TVs and will completely replace the same kind of foreign products. An Yongcheng, a senior electronics expert said, ''The birth and application of this chip will terminate the history that the core technique of producing color TV in China has long been monopolized by foreign countries since China ever began producing color TVs. From now on, the nearly 75 million color TVs produced each year by China will have their own homemade chips.''

As a project under the key support of the ''Electronic Information Industry Development Fund'' of MII, this achievement is also a new significant breakthrough since 2000 when our government began to encourage the development of IC core technology. Lou Qinjian, MII vice minister, introduced that up to the end of 2004, there are 68 color TV manufacturers in China with an annual production capacity of 86.6 million TVs, actual annual output of 73.288 million and the actual sales volume account for 55% of the global sales volume, China has become the world's biggest color TV manufacture and seller. But it's awkward that all these figures don't made China a TV giant. None of the over 70 million color TVs annually produced has a ''Chinese Chip'', which is the weakest point of the color TV industry in China.

''The birth of Hisense's Hiview will change the present situation completely. It will encourage Hisense to stick to the concept of establishing enterprises on technology and help Hisense cast off the passiveness of being under control of others in core technology fields. Relying on our own chips will introduce more capacities and functions for color TVs, reduce the cost and enhance the profit standard,'' said Zhou Houjian, Chairman of the Board of Hisense Group.

Different from the previous the chip research and development technological breakthroughs, Hisense's technology has stridden over the laboratory stage and realized batch production internally. The prospect of large-scale industrialization implemented by simple calculations is attractive to all.

This digital video processor named by Hisense as ''Hiview'' adopts the international advanced 0,18 micron CMOS (mutually complementary medal oxygenated semi-conductor, an IC production technique) process, with almost two million logic gates and more than seven million transistors interior integrated. Its chip design has reached million levels ultra large scale integrated circuit design levels.

''The core chips for Digital TVs normally include receiving and demodulating chips, decoding chips and digital video processing chips. The development of the digital video processing chips not only require high design capability, but also have the most meaningful significance and the highest value'' said Zhou Houjian, the engineer-turned board chairman.

Since Hisense decided to establish an ASIC (application specific integrated circuit) design center in 2000, it integrated resources, underwent hardships and made unremitting efforts in Shanghai. More than 1600 days of hard work without any result finally generated fruits. Up to now the chip has won over 30 patents (9 of them are invention patents). Its application experiment shows that it can be applied to various kinds of flat TVs (LCD Liquid Crystal TV, PDP Plasma TV, LCOS, DLP, etc.), CRT TV, and various rear projections and monitor equipment. All these patented technologies completely have the independent intellectual property rights. They sufficiently prove what Zhou Houjian often said in the company, ''The Chinese companies are able to change the situation of lack of self-confidence in the branches and make breakthroughs in core technology.'' To him, Hisense has won the war.

Certainly, the success of Hisense is also attributed to the policy support of the national ministries, departments and governments at all levels.

According to statistics of the Ministry of Commerce, the chips imported for the first half of 2004 valued at USD26.2 billion. It is estimated that the Chinese chip demands in China will reach 70 billion in 2010. Such a big Cake is attractive to all. Chips are regarded as ''industrial food'' in developed countries, but in China, it is a weakness. As a less competent chip designer and producer, but a big chip consumer, such contradiction will become increasingly intensified in China. Our government is aware of the situation and desires to solve the problem as early as possible. In 2000, the State Council promulgated the No. 18 document entitled ''Some Policies to Encourage the Development of Software and the IC Industries'' (No. 18 Guofa [2000] document). In response, the sales income of the chip industry in China grows yearly average above 30% within five years. The government greatly motivates the self-innovation ability of the national brands with controlling measures. In virtue of such policy support, Hisense resolved to enter into the chip R&D field and harvested fruits in the first five years. It is introduced that Hisense's Hiview has been successfully used on whole TV production and obtained market validation. On July 2nd, they will hold the official Inauguration Ceremony. Then the high definition TVs in China will formally activate their ''Chinese Chips.''

About Hisense Company Limited

Hisense Group is a large specialized electronics and information industry unit in China, which takes Hisense Company Limited as its main investment boby. Hisense Company Limited has experienced 35 years of development, growing through the stages of Qingdao No.2 Radio Factory, Qingdao TV Factory and Hisense Electric Company. Hisense has now become a large high-tech enterprise, specializing in electronics, household appliances, communication, IT and real estate, commerce, and trade development.

For many years, Hisense has committed itself to a strategy of "developing high technology, producing quality products, providing top-rate services and establishing a world-recognized brand." At the same time, the group has focused on industrial restructuring, technological innovation and capital operation. Hisense has first established the "3C" industrial structure dominated by consumer electronics, telecommunications, and computer. Hisense' main products include TVs, air conditioners, computers, mobile communication devices, software and Internet equipment. Up to now, Hisense has established more than 20 subsidiary companies at home and abroad. The assets have totaled RMB4,800,000,000. 2004 sales revenues were RMB27.300.000.000, ranking Hisense among the first few of the top 100 Chinese electronic manufactures. "Hisense" has become a nation-wide famous brand. In 1999, Hisense was awarded the "China Famous Brand", and in 2001, was first granted the "National Quality Management Award". These products are all famous brand in China including TVs, Air-Conditioners, Computers and Mobile Phones. Meanwhile, Hisense TVs, Air- Conditioners, Computers and Refrigerators are all exempt of commodities from inspection. Also, Hisense first gained the competence of export exemption from inspection. Hisense has a state-level technology center and a first-rate scientific research workstation for post-doctors. Moreover, the group has been playing a leading role in the Chinese electronics industry, drawing upon its efficient technology innovation mechanism. Every year, Hisense will assume dozens of state-level projects.

At present, Hisense has 200 sale companies and over 10,000 service outlets across the country. The group exports to about 100 countries and regions in Europe, Africa, Southeast Asia and America. In addition, Hisense has established its subsidiary companies and trade offices in the U.S., Japan, Brazil, Indonesia, the Middle East, Australia, the Hong Kong SAR, Italy, and other countries and regions. Innovation is life. The ten thousand Hisense staff members will keep on working hard to reach a target of "establishing an internationally famous brand" in a Hisense fashion: "be strict in standards and be fast in action."

For more information, please contact:

Zhu Shuqin, Brand Management Department, Hisense Group Tel: +86-532-3878888 Email: zhushuqin@hisense.com

Source: Hisense Group

CONTACT: Zhu Shuqin, Brand Management Department of Hisense Group, +86-532-3878888, or zhushuqin@hisense.com

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