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China knows no slowing down

Posted: 13 Mar 2008 ?? ?Print Version ?Bookmark and Share

Keywords:China? semiconductor? chipmakers?

If talks on the looming U.S. economic recession are expected to make semiconductor companies jittery, well, that's certainly not the case for manufacturers sashaying in China. And the recently concluded International IC-China Conference and Exhibition (IIC-China) validated this.

From packed show floors to long queues for registration to standing-room-only vendor seminars, the 13th IIC-China proved that chipmakers from all over the world are optimistic about the business this year, amid downturn concerns. Look at China.

"We are very bullish about China," emphasized Alfred Chow, director, global marketing and applications, Asia Pacific region, Cypress Semiconductor Corp. The company has in fact announced last December a new business center in Shanghai that will serve as the centerpiece for its Asian design, manufacturing, sales and marketing operations. Moreover, Cypress is expecting sales in China to triple in the next five years, with products such as the PSoC mixed-signal arrays driving growth. And the applications? "Still very much focused on consumer electronics," said Chow. "Cellphones, portable devices, white goods and e-bikes (electronic bikes)."

Analog and mixed-signal IC solution vendor Intersil Corp.

agrees. China will continue to dominate the manufacturing landscape. It is after all "the manufacturing center of the world," remarked Michael Wong, VP of applications engineering at Intersil.

Expectations, however, are high that the current high-volume, low-cost production mix will shift to the low volume but high-end design combo. All in due time, of course.

"In 5 to 6 years time, maybe, we can see a very exciting time," pointed out Kamran Malek, VP of marketing at Advanced MP Technology, a global distributor of electronic components. Malek stressed that China will certainly produce more qualified engineers that can handle designs that are more sophisticated. "You can already sense that at this year's [IIC-China] exhibition. The exhibitors are maturing, and so are the engineers."

Korean and Japanese companies who had a very strong showing at IIC-China share such sentiment. First-time IIC-China exhibitor Dongbu HiTek Co Ltd. of Korea believed it is the "best time to invest" as the company zeroes into China's booming mobile phone market, which is said to be growing double its rate every year. Dongbu HiTek last year established a Shenzhen sales subsidiary and collaborated with HNT Co Ltd., a homegrown manufacturer of camera modules. The company displayed its latest VGA, 1.3, and 2Mpixel CMOS image sensor chips and camera phone modules at IIC-China.

Another first-time exhibitor is analog IC manufacturer AnaSem Inc. of Japan. The company highlighted its lineup of CMOS MR magnetic sensor switches. After building its business in Japan, AnaSem is now eyeing the overseas market and China is its first stop, which according to Henry Lau, sales manager, Hong Kong branch, AnaSem, is a huge market for its analog solutions particularly for applications in industrial and in home appliances such as water heaters.

There is a growing consensus that China will certainly produce more qualified engineers that can handle designs that are more sophisticated.

By the numbers
Growth in Asia's chip market is expect to surpass the rest of the world over the next three years, expanding more than 8 percent annually hitting $203 billion by 2011, according to market research firm Gartner Dataquest. Accounting more than half of the market outside Japan is China, which will represent 63 percent by 2011, capturing share from markets like South Korea, Taiwan and Singapore.

Meanwhile, in 2007, China's semiconductor market sales revenue reached 562.73 billion yuan (about $79.11 billion), up 28.6 percent from 2006, according to Chinese consulting firm CCID Consulting. Three major fieldscomputer, consumer electronics and network communications accounted for 88.1 percent of China's chip market in 2007, with the computer IC market cornering the biggest share and registering a growth rate of over 20 percent, despite reduced printer output. Offsetting however, this decline is the rapid growth in notebook development.

As for the network communications IC market, demand for mobile phones and other handhelds fueled the sector's performance, clinching a growth rate of 19.2 percent. Meanwhile, with a decrease in output of finished products, growth rate of the consumer IC market stood at 15.6 percent. The automotive electronics sector on the other hand marked a 38.2 percent growth.

CCID projects that for the next five years, China's IC market will register a CAGR of 16.2 percent. By 2011, the China chip market will value at 1.080 trillion yuan (around $152 billion).

High hopes
These numbers are what fueling the optimism of companies like Rikei, Altera, Abov Semiconductor, C&S Technology, Leadis, Integration, Texio, Revel Electronics, Telit, Zilker Labs, TLG Electronics, Tamul Multimedia and Cayee Computer. The opportunity is just there, especially during shows like IIC where companies get to interact with local manufacturers.

Rikei for instance sees is rich portfolio of electronic components solutions addressing China's mobile phone and automotive markets. Altera on the other hand has its low-cost Arria GX FPGAs for the cost-conscious designer, while Abov Semiconductor positions its 8bit MCUs for industrial control use. As for C&S Technology, the company offers its Cronus VoIP solutions and Triton multimedia chips for China wireless and networking markets. For its part, Leadis has audio solutions in mind for China, powered by its Gmax Technology. Integration meanwhile has the fully integrated, low cost EZRadio Pro wireless chipsets for mesh network applications for both consumer and industrial monitoring and control.

Seeing increasing demand for test and measuring instruments particularly for system-level testing, Texio offers its tools for power supply and A/V testing. Revel Electronics on the other hand carries a wide portfolio of electronic components geared for consumer electronics and industrial applications.

Telit meanwhile has its wireless solutions, particularly GSM/GPRS/UMTS and CDMA modules for machine-to-machine (m2m) applications. As for Zilker Labs, the company offers digital power conversion and management ICs ZL2004 and ZL2006 for applications such as telecom/datacom equipment, high density servers and point-of-load power modules.

For TLG Electronics, it highlights its power solution offerings, zeroing in particularly on set-top box and LED lighting applications. For STB application, TLG developed a power solution to fulfill Energy Star standard for USA ATSC. For LED, TLD came up with a total solutions with power supply and trimming using MCU.

Tamul Multimedia on the other hand has its "dream on a chip" MP3 player plus iPod docking, which is available as a standalone or with MCU. Meanwhile, banking on its 20-year experience in the industry, Cayee Computer relies on its networking and embedded solutions to address the needs of China manufacturers.

- EE Times-Asia

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