2021 China Xinchang (Information Technology Innovation) Industry Development Report Overview

The report reviews the development environment and full industry chain of China’s Xinchang (information technology innovation) sector, summarizing core challenges and offering strategic recommendations for practitioners and researchers.

Xinchang aims to achieve autonomous, controllable IT infrastructure, focusing on building domestic alternatives in chips, sensors, base software, and application software, and is a key component of the nation’s digital economy and new‑infrastructure initiatives.

The ecosystem comprises four major layers: foundational hardware, foundational software, application software, and information/security. Domestic products are moving from basic usability toward broader usability and ecosystem richness.

Foundational Hardware includes terminals, communication, compute and storage devices. Core components are chips and sensors. Chips are divided into digital (CPU, GPU, FPGA, ASIC) and analog (including storage chips such as DRAM, NAND Flash). The GPU market is dominated by Nvidia, while FPGA and ASIC markets are led by foreign firms, though Chinese companies like Ziguang, Anlu, and others are emerging.

Chinese CPU development features participants such as Loongson, Zhaoxin, Phytium, HaiGuang, ShenWei, and HiSilicon. Technologies range from AMD‑based Zen architectures (HaiGuang) to x86 derived from VIA patents (Zhaoxin) and ARM‑based designs (Phytium, HiSilicon). Challenges remain in ecosystem completeness and high‑end talent.

Sensors cover a wide variety of signal types (audio, optical, electrical, thermal, etc.) and are used across many industries.

Foundational Software includes physical OS, cloud OS, databases, and middleware.

Physical operating systems connect hardware with higher‑level software and include desktop, mobile, and server OSes. Domestic OSes such as Kylin, UnionTech, and others have achieved compatibility with major hardware vendors and a broad range of enterprise applications.

In the mobile space, domestic OSes like Yuanxin OS (over 80% self‑coded) and Huawei’s HarmonyOS aim to reduce reliance on Android and iOS.

Cloud Operating Systems sit atop servers, storage, and networks, managing massive resources. They are becoming essential for digital transformation, security, and autonomous innovation. Leading domestic vendors (Alibaba, Huawei, H3C, Kylin) are building full‑stack ecosystems from chips to SaaS.

Databases are the software foundation of the digital economy. China’s market reached RMB 200 billion in 2020, with relational databases holding 80% share. Major players include foreign giants (Oracle, Microsoft, IBM, AWS) and domestic firms (Alibaba Cloud, Tencent Cloud, Huawei, DmDB, Kingbase, etc.).

Middleware bridges databases and applications, addressing distributed data transfer, access, scheduling, and integration. IBM and Oracle dominate the market, while domestic vendors (e.g., Dongfangtong, PuYuan, Baoland, Zhongchuang, Kingdee) hold about 15% share and focus on government and SME sectors.

The industry is dominated by four large groups—Huawei, China Electronics CEC, China Electronics CETC, and Inspur—forming comprehensive ecosystems covering infrastructure, software, applications, security, cloud services, and system integration.

Penetration is highest in government and finance, moderate in telecom, transportation, energy, and aerospace, and lowest in education and healthcare. The report provides download links for the full 2021 Xinchang industry development report and related research materials.