China's mobile chip designers are on the rise.

Chinese companies took nine of the top fifty spots in the 2014 fabless IC company ranking, up from one of them in 2009, according to a report to be issued later this month by IC Insights. At least five of the eight new entrants to the Top 50 have a significant focus on today's hot smartphone market.

China is still relatively small as a fabless chip supplier, accounting for just 8 percent (US$80.5 billion) of the global market, the market watcher said. But its rise is significant, fast, and strategic.

China currently accounts for “twice as much of the top 50 fabless IC market share as the European and Japanese companies combined,” IC Insights said in an email blast. “Nineteen US companies were represented among the top 50 fabless suppliers in 2014, and they accounted for 64 percent of the total top 50 fabless company IC sales,” it added.

By contrast, Japan held less than 1 percent share. A basket of other countries, including South Korea, represented only 6 percent of the market.

Bill McClean, president of IC Insights, said last fall that China’s government and industry leaders are pivoting from a strategy that focused on foundries to one that focuses on fabless design companies.

Spreadtrum has become the poster child of its new industrial policy in semiconductors. Late last year it was the focus of the first large merger among China’s many small fabless companies, and in September it attracted a whopping US$1.5 billion investment from Intel.

“China’s ambitious late-1990s plan to create numerous high-volume indigenous IC manufacturers in the pure-play foundry segment did not come to fruition,” IC Insights said. But “the Chinese government still intends to create a dynamic environment in the China-based IC industry, including placing additional emphasis on establishing new fabless IC suppliers,” it said.

Specifically, the market-watcher cited the national government of China’s plan to invest US$19.5 billion in semiconductors along with US$97.4 billion from local governments and private equity investors. “IC Insights believes that these outlays have the potential to significantly change the future IC supplier landscape,” it said.

For decades, China has been seen as the next big powerhouse in semiconductors, a prediction that so far has not panned out. To date, China’s impact in electronics is still mainly as a consumer and an assembler of board-and system-level products. But the slow uptake of China’s foundries and still nascent state of its fabless companies should not lull observers into complacency about the country’s potential.

“Chinese presence in the future IC industry is alive and well and should be taken seriously,” IC Insights said. “As Chinese IC design houses continue to advance, IC Insights expects an increasing number of China-headquartered companies to move up in the ranking of top fabless IC suppliers,” it added.

Details of the top 50 fabless companies of 2014 will be released later this month as part of the 2015 edition of The McClean Report.