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China IC Industry Is Moving against the Tide

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Joined: 26 Mar 2009
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PostPosted: Fri Jul 24, 2009 2:35 am    Post subject: China IC Industry Is Moving against the Tide Reply with quote

After 40 years of development, China’s IC industry has formed an industrial cluster with certain scale and harmonious development of all industrial chain sectors. Especially under the guide of relevant supporting policies to the development of integrated circuit industry, China’s IC industry has entered the maturity period from the high-growth period.
According to the incomplete statistics, from 2000 to 2007, China has invested more than USD 29 billion in IC industry, around 9 times more than the total investment amount of the 30 years before 2000. Besides, the scale of China IC industry also expanded rapidly in these 7 years, and the technical level improved significantly, with an average annual growth rate of 30%. In 2007, the IC industry output reached 41.16 billion chips, and the sales amount reached 125.1 billion Yuan.

However, the world financial crisis brought serious setback to the IC industry. In 2008, the global semiconductor and IC industries experienced the most severe challenges for nearly 20 years. Compared with 2007, China’s semiconductor industry declined 0.4%. Anyway, backed by the rapid development of the domestic market, China’s IC design industry still achieved 4.2% growth. In addition, there are still some foreign semiconductor companies increased investment in China market and has maintained a rapid growth trend during such a serious financial storm.

According to the research and investigation result to 30 Chinese semiconductor companies, in April of 2009, China’s IC industry increased 8.5% compared with the previous month, which is the first positive growth; among which the design industry growth was 21.1%, and packaging industry was 15.9%. All of this show that China’s IC business recovery situations have emerged. iSuppli forecasts that in 2009 China’s output value of IC design industry would be 4.159 billion U.S. dollars, with a growth rate of 21.93% compared with the USD 3.411 billion of 2008. It is hard to imagine that when the global semiconductor industry is experiencing a 10% decline. The main reasons are: the growth of domestic demand, commercial using of home-made standards, effect of lipstick, the presence of the GEM, the preferential policies as well as the innovation of the industry chain. We have reasons to believe that China’s IC industry will embrace a bright future in the near future with the factors above.

Some analysts indicate that the annual compound growth rate of China’s IC market will exceed 20% in the next few years. It was expected that China’s IC industry will become a big market of more than 120 billion U.S. dollars by 2010. Such a huge market demand attract semiconductor companies from Europe, America, Japan, and Korea etc. to successively enter into China market by virtue of their core technological advantages and advanced management experiences. China’s semiconductor industry is increasingly becoming a global industry, whose market is very dynamic and technology improving and industry chain evolution. Under such a background, the semiconductor companies in mainland China that have just completed the initial accumulation and development will undoubtedly embrace a very important historic moment, which is an opportunity, but also a challenge. And “basing on mainland market, adhering to innovation” would be the only option for Chinese semiconductor companies facing the opportunities and challenges!

I’d like to listen different ideas from you and let’s share more new thought about IC industry here. Besides, if you want to develop your business in China market or need any help from China, please feel free to let me know!

BICDS (Binhai Integrated Circuit Design Service Center)
Tel: 86-22-66203159
Fax: 86-22-66211568
Email: evelyn.wang@bicds.org
Website: www.bicds.org
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