Currently, Chengdu is the important base for software and IC as well as IT parts and information security products manufacturing base and IC designing base in West China . Mianyang, an emerging new force in West China IT industry, has become now the national largest digital audio/video products making city and the important military and defense electronics-manufacturing base. Deyang, focusing on controlling systems for power generating, speed control and other key and large equipment and machineries, is rapidly emerging as the new base in machinery industry informationalization for West China as well as for Sichuan . Thanks to Phoenix investment in Leshan, Leshan now is one of the largest semi-conductor manufacturing facilities in Asia . Thanks to the Phoenix investment in Leshan, Leshan has become of one the largest semi-conductor separator manufacturing facility in Asia . Guangyuan, owing to its large number of defense electronics manufacturing firms and its traditional industrial infrastructure, has become important radar controlling capability manufacturing base for China . Table 1 summarizes the IT industry and the major product lines in Sichuan .

Table 1 Sichuan IT Industry and the major Product lines

(2) Rapid Development of Software Industry

Sichuan software industry, compared to its counterparts in other regions, is rather young. After many years of development, has formed its good capacity focusing on producing products in information security, social security software, electronic civil administration system, digital recreation software, built-in software, and telecommunication software. By the end of 2004, Sichuan had 3 Grade 1 firms, 9 Grade 2 firms, 92 Grade 3 and 4 firms in computer information, ranking number 4 in the nation; in the area of software, 311 firms have obtained the certificates with 856 registered software products, ranking the first in West China.

Along with the continuous improving in software development environment, there gather more and more home and international software large firms in Sichuan . In addition to about 20 large multi-national firms like Intel, Micro-soft, Motorola, Alcater, Nokia, Siemens, IBM, Sun, and Oracle subsidiaries, offices and/or R&D facilities in Sichuan, Yongyou, Lenovo, Kingdee, Baoxin, Zhongruan, Orient Software, Gold Mount, and Shengda have set their foot in Sichuan IT industry, which have brought Sichuan with new technology and resources as well as the new dynamics for development.

(3) Excellent Development of the Industrial Base and Infrastructure

Sichuan highly appreciates the role of industry bases in developing the industry clusters. At present, Sichuan has developed its industry clusters around the state Hi- New Tech Parks, colleges and universities, state business &Tech. zones. The firms in the clusters are specialized in different areas yet collaborating to produce the synergy. Thus sc has shaped its IT R&D and development structures. At the same time, the province is making great efforts in developing 6 important bases: state software base, Western IC designing and manufacturing base, Western optical communication products R&D base, the state information security technology base, western electronic parts and materials manufacturing base and intelligent home appliances and audio -video digital products manufacturing base (Fig. 5).

Fig.5 Chengdu Hi-New Tech. Park: “one network with two wings and 5 platforms”

Take Chengdu Hi-New Tech Park for example (Fig.6), the park has been maintaining the strong development momentum ever since its approval by the state in 1991. At present, the park is accommodating about 6000 registered firms with a total registered capital up to 24 billion RMB. 7 firms have their annual sales over 1 billion RMB, more than 50 firms over 100 million RMB. The Hi-New tech firms consist of 52.7% of that in sc. There are more than 500 foreign-invested firms including Fortune 500 firms like Intel and Motorola.

Fig. 6 Chengdu Hi-Tech Park

Sichuan is the hub for Southwest China in communication. The telecommunication network has a rather wild coverage providing quite comprehensive services. By the end of 2004, Sichuan has an optic cable network up to 190 thousand kilometers. The long distance network integrated with the local network has been optimized which greatly upgraded the level of digital technology. At the same time, the number of phone users has been growing on continuous bases. By the end of 2004, the sales from mobile phone consumption reached 20.5 billion (RMB), an 11.4% annual growth; the number of phone users reached 28.855 million. Of which, 13.70 millions are stationed phone users and 15.15 millions are mobile phone users. The provincial phone coverage stands 33.16%, 17.68% for mobiles and 15.98% for stationed phones respectively. The province also sees rapid growth of Internet users. The PPP users reach 1.69 millions while the wide band users are 0.95 households (Fig. 7, 8, and 9).

Fig. 7 Phone users in Sichuan

Fig.8 Sichuan Telecommunication Business Sales

Fig.9 Sichuan Phone Coverage and Growth

As the provincial capital and the center of the province IT development, Chengdu is now ranked as the 4 th largest airport, one of the 6 centers in transportation and telecommunication in China . Chengdu is one of the best cities in West China in the areas of informationalization process, network infrastructures. Chengdu household internet interface ration is larger than 1, the number 3 city in China, the ownership of home computer per 100 households stands at about 20 sets, the 5 th in the nation. Chengdu has developed its good information platform keeping at the same pace as the international communication development. Currently, Chengdu has installed about 68 kilometer long optic cable with 4 international and national connecting facilities: China Telecom Chengdu Center, China Golden Bridge Chengdu, China Sichuan Science & Technology Chengdu and China Education Southwest Center . In addition, Chengdu also enjoys about 10 professional and specialty network, covering business, finance, taxation, statistics, industry and commerce, materials, price monitoring, transportation, R&D, agriculture and urban development and construction.

Professional talents are the key successful factor for IT industry. Many years of intentional human resources development determinates that Sichuan is not lagging behind compared to the developed coastal regions in terms of technology application, or input/output productivity. This makes possible for Sichuan to be the leading province in West china in developing IT industry and in participating in the international IT competition.

Sichuan enjoys a large number of research institutions, colleges and universities, some of which are among the first class of its kind in China , training and producing large amount of talents each year and providing good stock of professionals for Sichuan IT take off. The IT human resources are well structured, not only the quality research oriented people but also applied professional. After many years of fostering, Sichuan has developed a group of new and competent IT firms(Fig.10).

Fig.10 University of Electronic Sichuan Science and Tech. Graduate Firms

Sichuan enjoys a good labor quality, a critical factor for IT industry development (Table 2). Compared to the east coastal regions, Sichuan enjoys solid large number of labor supply with good quality and low labor cost, which is definitely a strong plus for the potential investors home and abroad.

Table 2 A Comparative Studies on IT Labor Cost against Other Regions      （RMB）

Source: “ China Stats 2004”

Traditionally, Sichuan is the national base for the defense electronics industry, enjoying unique advantages in China in defense electronics R&D.

Sichuan has the most comprehensive defense electronics industry in China , covering products in electronic confrontation, information collection, confidential communication, aviation and space electronics, enemy identification, radar, electronic carriage, instruments equipment, defense apparatuses and components, and defense electronic materials. Sichuan is also rather experienced in R&D as well as manufacturing in defense electronic system, instrument system designing, and system integration. The province demonstrates a rather strong R&D and manufacturing capability in defense electronic products with a quite comprehensive defense electronic industry.

With the rigorous and dynamic development, Sichuan IT industry demonstrates great potential with unique features that helps to form its unique features in China .

IC chips forming and designing. Sichuan has developed its foundation in semi-conductor industry. With the location of Intel investment of $375 millions in chip forming at Chengdu , followed by China Chips' $175 million investment and Malaysia Nisson $210 million testing facility, Chengdu is gradually becoming the important base in the area in West China . The first integrate chip line in West at Leshan and China 's largest polycrystalline silicon manufacturing facility at E Mei, both under construction, Sichuan is completing its industry chain, it is expected that the industry will have prosperity in the near future.

Digital Recreation Software. Sichuan has the third largest market share in China of Internet games market. There are about 1.5 million Internet game funs and 100,000 on-line users indicating bright market potentials. There are about 30 games developers with intellectual rights. Chengdu has started its Recreational Software Park . Already, some developers, operators, content providers and manufacturers start their business in the park.

Digital Home Appliances. Home appliances are Sichuan 's traditional industry. The current home appliances are moving fast towards digital 3C . Consequently, Sichuan manufacturers have accelerated their paces in digital home appliances R&D to meet the demand. The results are quite encouraging. Good example is Changhong that is becoming the leader, home and international, in digital TV technology development.

From the market point of view, entering Sichuan means entering and securing West China market. With the further development in West China , with acceleration of the IT industry growing, and with the informationalization process, we have good reasons to expect great potentials for IT industry. Against the background, Sichuan is leading the trends and will have a strong spin-off effect on the neighboring provinces.

Even at a fractural level, the market potential is still very attractive. As a major metropolitan in West, Chengdu has a population over 10 million with an already well developed regional IT market, engaged in hardware and software whole selling, distributing, retailing and services providing.