For Hisense, one of the largest electronics and information companies in China, "innovation is the engine that drives it to create super values for customers."

Having set foot in the fields of household appliances, telecommunications, information and other areas, the company has established more than 20 companies at home and abroad.

"Now Hisense has a powerful capacity to produce annual stock of 10 million colour TVs, 3 million air-conditioners, 4 million CDMA phones, 1. 6 million refrigerators, 1 million computers and digital equipment such as firewalls and servers," says Guo Qingcun, vice-president of the company.

"And we aim to increase our sales revenue to achieve 100 billion yuan (US$ 12.66 billion) by 2010," he adds.

TV chip

Colour TV is an important product of Hisense. In 2005, the sales volume of Hisense colour TVs reached 7.21 million.

Last year the company developed the first digital media processing chip, a high-definition and high vision chip in China, of which it has its own intellectual property right (IPR).

Before that, the core technologies of chips for colour TVs were controlled by foreign countries.

The Hisense chip has won over 30 patents, and 9 of them are invention patents.

"Relying on our own chips we will introduce more capacities and functions for colour TVs, reduce the cost and enhance the profit standard," says Guo.

Guo says the creation and application of the chip will help end the monopoly foreign firms have had on the market. "The nearly 75 million colour TVs produced each year by China will have their own homemade chips," he says.

China is the world's biggest colour TV manufacturer and seller. But its large production scale hasn't made it a TV giant.

None of the over 70 million colour TVs annually produced in China have a Chinese chip, which is the weakest point of the colour TV industry.

"According to statistics the chip demands in China will reach 70 billion in 2010," Guo says. "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, China will face increasing problems in the field, he says.

The government is aware of the situation and desires to solve the problem as early as possible.

China's Ministry of Information Industry has pointed out that China will put more effort into boosting the semiconductor industry, especially the integrated circuit (IC) industry.

The government will also set up a special fund for supporting the semiconductor industry.

Research and Development

Guo attributes his company's success to its big investment in Research and Development work (R&D).

"Our company has always paid attention to investment in R&D. Expenditure on it every year takes up more than 5 per cent of the annual sales revenue," says Guo.

Hisense R&D centre was established on the basis of previous Hisense Group headquarters, which integrated R&D, production and administration together.

As a research entity combining industry, academy and research, Hisense R&D established "Hisense Research Institute of Shandong University" a platform on which Hisense co-operates with renowned higher education institutes.

"The basis of technology innovation is the gathering and cultivation of talents," Guo says. "For years, Hisense has been sticking to the talent-oriented operation concept and has formulated the human resources exploration system based on the mechanism of hunting, utilization, cultivation, promotion and holding, which is proved to be an excellent HR development and management system."

"Moreover, Hisense has established an all-directional, multi-layer talent training system," he says.

The Hisense Academy, located at Hisense R&D Centre offers good opportunities for knowledge updating and development of its R&D staff. It has entered into co-operative relation with the Beijing University of Aeronautics and Astronautics to set up an engineering postgraduate programme approved by the Ministry of Education and with Peking University to set up an MBA remote education training programme.

"These measures turned out a large number of talents for Hisense," Guo says. "Besides, Hisense will put in 10 million yuan (US$1.26 million) a year and send technical personnel abroad for international exchange and training. All theses measures serve as a guarantee for the supply of talents to Hisense."

(China Daily 10/30/2006 page9)