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Wireless, storage, and computing named as hot spots

Posted: 04 Sep 2003 ?? ?Print Version ?Bookmark and Share

Keywords:agilent technologies? wireless? storage? computer? electronics?

At Agilent Technologies, we believe that wireless, storage, and computing technologies will have the greatest impact on China's electronics industry over the next three years. China has already surpassed the U.S. in terms of mobile subscribers, and the Chinese Ministry of Information Industry predicts more than 52 million mobile phone subscribers will sign on this year. This explosive growth is driving handset sales and the deployment of basestations and other transmission equipment. The country's 25 handset makers and service providers have grown in sophistication and skill to offer well designed handsets and new 2G and 2.5G CDMA and GSM wireless networks comparable to those found in Europe and North America.

The modernization of China has also fueled government and business purchases of PCs, servers, and storage networking equipment. China IT managers are following western companies in designing storage area networks to connect company servers to large storage arrays. China has become the No. 2 market for PCs, fueled in part by the popularity of the Internet. These technologies are having a profound impact on China's growing economy. Local and foreign investments are pouring in to open new markets and spawn numerous fabless semiconductor companies, fab and assembly plants, and a wave of new products that are combining to make China a technology powerhouse.

There is a massive intellectual property transfer underway from the West to China, via the return of ex-patriots, technology partnerships, outsourcing of R&D, and reverse engineering - rapidly closing the capability gap between Chinese companies and their counterparts in the West. The advantages of a large labor pool and home field relationships positions Chinese companies to win a major share of the domestic market. The government's strong emphasis on export-driven economic growth is as well turning China into a fierce global competitor.

The Chinese government has stated its intent to move its domestic handset makers from 25 percent to 85 percent of the local market in three years. In response, Chinese OEMs are rolling out highly competitive, low-priced 2G and 2.5G handsets. Further, with the 2008 Olympics set to take place in Beijing, China will ready digital TV receivers for roll out and build an advanced computing, storage and networking infrastructure. EMS/ODMs and a strong supply chain are expected to will play a key roll in these developments.

Meanwhile, electronic products with the biggest market potential in China include mobile handsets, enterprise servers and storage arrays.

The Chinese handset market is expected to grow to 210 million subscribers next year, providing significant opportunities for both Chinese suppliers and international players. For example, Agilent provides a full range of components for mobile phones including camera modules for digital pictures, RF components that help shrink handset size and save battery life, infrared transceivers for transmitting data, surface-mount LEDs that provide backlighting styling options, and an ambient light photo sensor that saves battery life by controlling backlighting.

The growth of storage networks has also been explosive. Servers and storage arrays are in demand by companies to route and store huge amounts of business-critical data. As a key part of China's infrastructure build out, companies are constructing data centers housed with banks of servers connected to terabytes of pooled data in large Fibre Channel storage arrays. Agilent is the leading manufacturer of Fibre Channel controllers used in storage arrays, and also develops physical layer ICs, switch fabric solutions and fiber optic transceivers. With all of these factors, there is tremendous potential for indigenous Chinese and international companies alike to help drive China's growth well into the 21st Century.

- Max Yang

VP of Asia-Pacific Field Operations

Semiconductor Products Group

Agilent Technologies

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