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China consumer IC market to continue growing, says CCID

Posted: 11 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:China IC market? consumer IC? digital consumer electronics?

The market of China's main electronic products grew steadily in 2007 with a market value of $21.9 billion (150 billion yuan). Over the next five years, China's consumer IC market will develop smoothly and maintain an upward momentum with a compound growth rate of 16.9 percent, forecast CCID Consulting. However, the growth rate will decrease due to lack of emerging applications.

Decreasing growth rate
The consumer IC market develops the slowest among other IT fields such as computer, network and communication, industrial control, automotive electronics, and other main applications fields. This is driven by sharp decrease of traditional black goods production, which makes the related IC market shrink.

Meanwhile, emerging consumer products such as DTV and digital photo frame have not form enough scale to drive market development, and digital consumer electronics production develops steadily, which leads to a stable digital consumer IC market. Besides, decreasing product price limits the growth rate of China's consumer IC market greatly.

The market of China's traditional home appliance and small appliance market, including color TVs, audio products, washing machines, refrigerators, air conditions, microwave ovens, fans, and electronic toys, has gone from a rapid growth stage to a mature stage, which provides little support for the development of the consumer IC market. Meanwhile, as the accelerating replacement of digital consumer electronics to traditional products and corresponding industry transfers to mainland, demands on decoders, memories, high performance processors, graphical processors and other high-end chips will grow rapidlydriving China's consumer IC market.

As an important consumer product in the next five years, DTV will drive the development of the IC market. Rapid growth of DTVs will promote a new round of growth of TV ICs, embedded CPU, FPGA, memories and other ICs. Besides, the STB, acting as a transition product from analog age to digital age, will be a leading product for DTV industry in the future five years.

IC price decline
In the coming five years, the average price of China's consumer IC market will first come down before going up again, that is, average price will decrease before 2008 and increase after 2008. This trend lies in two contrary influencing factors. Meanwhile, with increasing market scale, the price of consumer electronics will decrease, which bring pressures to IC providers. The price of general products and high inventory products will fluctuate mostly.

On the other hand, IC providers will accelerate product upgrading to provide ICs with larger capacity, higher performance and more functions, which slows down the decrease of IC price. Consumer electronics structure upgrading will drive the demand of higher price ICs, which lifts the average price in the IC market. Driven by these two contrary factors, the average price of China's consumer IC market will first go down before going up in the future.

With a fast-growing consumer electronics market, China's consumer electronics manufactures will face more challenges in choosing product types, IC providers, developing solutions, technology upgrades, and other issues. As new IC products emerge, consumer electronic manufacturers will need more support on product types, reference design, development tools providing and R&D staff training.

Facing increasingly fierce competition and globalization IC supply trend, the diversion of industrial divisions in the industrial chain will become more professional. For chip providers, the future lies in the construction of logistics and engineers, third party design plan partners, technology support, localization and business management.

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