China's semi industry bucks global trends
By Manoj Aravindakshan
EE Times
(05/16/01 17:14 p.m. EST)
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MANILA, Philippines — China's semiconductor industry will grow steadily in 2001 despite the global electronics slump, according to a market survey.
Against the backdrop of a global industry slowdown, China's IC industry is expected to grow a robust 6.3 percent this year, market researchers Gartner Dataquest projected. Revenues are forecast to reach $13.6 billion this year from $12.8 billion in 2000.
Under normal circumstances, that growth rate would be considered modest at best. The Gartner projections look rosy considering the global IC industry has been in decline since the fourth quarter of 2000. In sharp contrast to the Chinese market, Gartner is projecting an overall 17 percent decline in semiconductor revenue for 2001, a steep fall from the 32.4 percent growth registered last year.
"China has a huge domestic market for PCs, mobile phones and consumer electronics, which includes goods like DVD players," said Dorothy Lai, a senior analyst with Gartner Dataquest in Hong Kong. "Demand from this market continues to be strong, which explains why China will buck the overall industry trend."
Lai said export-dependent countries like South Korea, Singapore and Taiwan "will register negative growth rates of 15.6, 12.3 and 14.6 percent, respectively."
Lai predicted that the sharpest declines would take place in the first and second quarter of 2001, with the market turning around toward the end of the year. "A lot depends on how much demand picks up for mobile phones and PCs," she said. "The state of the U.S. economy and the political situation in some of the countries in the region are some of the other variables that will affect the market."
Data-processing (comprising PCs, printers, hard drives and optical drives) accounted for more than 50 percent of the semiconductor revenues in the Asia-Pacific region last year, with communications (24 percent) and consumer electronics (21 percent) the other key application segments. This proportion is not likely to change much this year, though Lai said communications would outperform other segments over the next few years.
"The communications segment will grow at about 20 percent annually until 2005, whereas overall electronics equipment is forecast to grow at only 11.7 percent," she said. "Not only is there a huge handset market, but also countries in the Asia-Pacific [region] are beefing up the telecom infrastructure, both wired and wireless. This obviously augurs well for the semiconductor market."
In fact, revenues from all semiconductor devices are expected to decline this year, except for opto-semiconductors. Worldwide, memory devices will record one of the highest drops in revenues, from $54 billion in 2000 to about $40 billion in 2001. An expected slowdown in demand for cell phones has hurt the flash memory market, which is now projected to remain flat this year, after recording a phenomenal 135 percent growth in 2000 to reach $11.1 billion.
Said Lai, "Hopefully, with an increased uptake of mobile phone handsets, the situation for flash memory should improve by the end of this year."
The market researcher lists India, Malaysia and the Philippines as emerging markets. "There is certainly some positive activity in the electronics industry in India. Also, I personally see a number of electronics equipment makers moving to the Philippines in the next three to four years."
Manoj Aravindakshan is online managing editor for EE Times sister publication EE Times Asia. |
