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China sees big opportunities in wireless

Posted: 06 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:wireless? consumer? market? outlook? convergence?

Schmitt: The global growth in innovation is moving closer to the consumers!with wireless as the primary driver.

The global growth in innovation is moving closer to the consumers!with wireless as the primary driver. And with the plethora of cellphones and smart phones in the market, Cypress believes that there will be a bigger demand for memory requirements.

Just recently, Cypress bought FillFactory NV!a Belgium-based company involved in active pixel CMOS image sensor technology!to boost sales in the cellphone market segment. The CMOS manufacturing process used to make image sensors is similar to that used to manufacture memories. This also makes FillFactory a great fit with Cypress's core manufacturing capabilities.

Another trend is the convergence of different consumer devices. Converging voice, music, camera and video into one platform is happening quickly in Asia. Currently, one-third of Cypress' business comes from the wireless and handset sector, one-third from the wired market and another fraction from the computation segment.

The outlook for this year is that china will build more infrastructures and will develop faster in communications and network sectors than the rest of the world. The growth rate for network infrastructures is predicted at 10 percent, while the consumer market will grow close to 15 percent. The worldwide semiconductor industry growth is projected at 10 to 12 percent.

In 2004, the average growth rate of the whole industry grew at about 15 percent. Cypress' growth rate for last year was about 16 percent. Although the figure is lower than the 30 percent Cypress initially announced, 2004 has still been a strong year for us.

The global semiconductor growth rate may be relatively slow in the first half of 2005, but in the next half, a 15 percent growth rate is expected.

From 2005 to 2008, diverse market dynamics will be seen in wireless products, in which many companies will heavily invest. New technologies will replace existing ones, focusing on cost and power reductions. Where the last five years have been focused on improving semiconductor processes, the next five years will center on the development of new technologies.

Cypress will also continue to invest in technologies outside the semiconductor business. Our solar business, for example, is doing well. It is expected to grow faster than the rest of the company to about 8 percent of our business next year. This business will help mitigate the cyclical nature of the semiconductor business. We believe mainland China will provide a big market opportunity for our solar cells and panels. Mainland's solar industry growth was 40 percent in 2004, and is projected to be even higher in 2005.

- Ralph Schmitt
Executive VP
Cypress Semiconductor Corp.

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