Many of us probably know that Freescale Semiconductor's DragonBall processor, which at one time became the staple of portable computing, was developed in Hong Kong back in 1995. It provided Freescale's precursor, Motorola Semiconductor Products Sector, with a major design win and helped Palm to build and launch the world's first successful PDA.

For Hong Kong Special Administrative Region (SAR), this milestone seems far more important now than it was in 1995. That's because the island, which once prospered on top-notch financial services and mega real-estate projects, is now striving to make up for lost opportunities in the semiconductor design field.

The fact that Hong Kong missed out the tech wave for lucrative sales and marketing pursuits is coming back to haunt the island. At a time when mainland China is witnessing a remarkable transformation in electronics arena, Hong Kong seems technologically aloof, more of an initial public offering springboard for mainland's successful technology outfits.

No wonder it's now offering some strong incentives for setting up design facilities, and to attract design shops, it's competing once more with its long-time nemesis Singapore. Though chipmakers like Infineon and STMicroelectronics have sizable design activities in Singapore, what's driving the Lion City is the changing dynamics due to migration of hard-disk-drive (HDD) manufacturing to China.

There are some good design houses in both Hong Kong and Singapore. What Hong Kong sees as leverage is the proximity with mainland China. And so there have been some significant developments in this regard.

Organizations like Hong Kong Science & Technology Parks Corp. (HKSTP) are beefing up ties with electronics design industry in the Pearl River Delta area. HKSTP, along with Hong Kong Advanced Packaging Technology Ltd, recently entered a reliability engineering test service agreement with Shenzhen IC Design Incubation Co. Ltd and Huawei Technologies.

Huawei's chips are examined under a number of test environments, including hot-air reflow system and thermal shock test, to ensure that they meet industry's high reliability standard. Clearly, strategy is to pick areas where Hong Kong can leverage its infrastructure and complement mainland's fast-growing silicon industry.

On a much bigger scale, we see the concept of the so-called "9+2" framework that will link the nine provinces of Fujian, Guangdong, Jiangxi, Hunan, Guangxi, Hannan, Guizhou, Yunnan and Sichuan with the two special administrative regions of Hong Kong and Macau through a new web of road, rail and air routes. The Pan-Pearl River Delta project would extend Hong Kong's reach from the south and east of mainland China to the center and west.

This could bring a new window of opportunity for Hong Kong to build a design-support industry that effectively mixes its management skills and professional services with new tech endeavors.

Hong Kong's nod to the strategic importance of core electronics design work is a no-brainer. Earlier, it has toyed with high-profile IT projects like Cyber Port, but as America's ascend in the PC world shows, such businesses actually grow from the silicon industry.

The real challenge for the island, therefore, is how it reinvents itself in the semiconductor realm amid flurry of electronics design activities in its backyard.

Hong Kong is known for its resilience. It'd be interesting to see how far this rude awakening takes it in making the best of China's electronics gold rush.

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