China's chip output to top $8 billion by 2005, says report
Semiconductor Business News
(08/28/02 08:09 a.m. EST)
EL SEGUNDO, Calif. -- Chinese semiconductor output will more than double from under $4 billion in 2002 to more than $8 billion by 2005, according to iSuppli Corp., a market research company. However the supply of Chinese chips will fall far short of local demand which will approach $25 billion during the same time frame, the company said.
These market estimates are contained in a report titled “Semiconductor wafer manufacturing in China -- a panacea or a global investment trap?”. In it, author Len Jelinek, principal analyst for semiconductor manufacturing and supply at iSuppli Market Intelligence Services, provides a picture of the Chinese semiconductor manufacturing industry and a look at the wafer suppliers.
In a second report on the demand side of the market author Scott Hudson, principal analyst for electronic manufacturing services (EMS) in China predicts that China will have combined factory revenues in electronics goods of $156 billion by 2006.
EMS companies in China are set to generate more than $19 billion in revenues in 2002, and this will grow to more than $66 billion by 2006, a compound annual growth rate of 33%. At the same time the report says that ODMs, a Taiwanese business model centered around the personal computer and digital games industry, will expand revenues from nearly $35 billion in 2002 to more than $90 billion in 2006, to achieve a 30% CAGR.
"Unlimited cheap labor, more than 1.4 billion eager consumers, and a booming economy ripe for development, the so called 'China Dream', represent an irresistible lure to electronics manufacturers around the world," said Jelinek in a statement. "With the recovery of demand for electronic equipment proceeding slowly in the rest of the world, virtually every semiconductor manufacturer is now evaluating plans to take advantage of this immediate high growth opportunity represented by China."
Jelinek also said "The key factor restraining domestic China semiconductor growth will continue to be the Wassanaar Agreement, which restricts access to advanced semiconductor processing equipment by China that could be used for military purposes. Any changes here could have dramatic consequences."
The reports are available as part of a continuous intelligence service on China that iSuppli offers. Pricing details of the service or the reports were not given. |
