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China becomes largest IC market

Posted: 10 Jan 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Mark LaPedus? chip production? semiconductor? IC Insights?

While China's domestic chip production remains relatively small, the nation's semiconductor market grew by 32 percent to $40.8 billion in terms of overall consumption in 2005, making it the world's largest regional IC market for the first time ever, according to a report from IC Insights Inc.

By 2010, China's IC market is projected to more than triple and reach a stunning $124 billion in terms of overall consumption, according to the research firm.

Last year's 32 percent increase in China was much greater than the 8 percent growth rate the total worldwide IC industry displayed in 2005, according to the market research firm.

From 2000 through 2005, the Chinese IC market registered a compound annual growth rate of 33 percent, as compared to minus 8 percent for the Americas semiconductor market during this same time period, according to IC Insights.

In 2005, China represented 21 percent of the world's $192.4 billion in IC consumption, up from 6 percent in 2000. As recently as 2000, the Americas IC market was more than five times the size of China's IC market.

Overall semiconductor sales in the Asia-Pacific are projected to grow by 69 percent between 2004 and 2008, reaching $150.4 billion in that year, according to an annual forecast of global semiconductor sales by the Semiconductor Industry Association. The overall growth projections for this region are by far the highest, according to the forecast.

Meanwhile, although China was the world's largest IC market, the nation's domestic chip production remains relatively small. China-based IC production was only about $2.6 billion in 2005, according to the firm.

IC Insights forecasts that China-based IC production will rise to $12.1 billion in 2010, a 36 percent compound annual growth rate. That represent only 4 percent of the total forecasted $319 billion worldwide IC production in 2010.

Moreover, the $12.1 billion worth of local Chinese IC production would be only about 10 percent the size of the $124 billion Chinese IC market forecast for 2010, according to the firm.

- Mark LaPedus
EE Times

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