IC demand on the rise in China

As its borders begin to open up, China continues to emerge as a giant player in the technology industry, especially in the area of IC demand.

China's IC demand in the computer segment amounted to an estimated $9.3 billion in 2003, and is rapidly growing to the point that the giant developing nation could amount to 25 percent of worldwide IC revenue, or $69 billion, by 2009. That's according to a new study issued by Databeans, a Reno, Nev.-based market research group.

Databeans says the bulk of the rapid growth is because of the telecommunications manufacturing segments and growing capacity in the consumer and computer markets. China's largest markets in terms of IC demand are computers and communications. The researchers call for an average increase of 15 percent for the next five years in China.

Communications is the fastestgrowing segment with an average annual growth rate of 21 percent. IC demand in China is expected to grow at an average rate of 17 percent per year, according to Databeans.

The researchers say China, as the world's largest consumer market, presents an attractive opportunity for foreign investors, and especially for those interested in high-tech manufacturing investments.

China's central government has been very supportive toward increasing high-tech manufacturing capacity, in offering low-interest loans, tax exemptions, and direct investment for the expansion of existing facilities.China is also quickly outpacing some of the world's largest manufacturing centers. According to China's Ministry of Information Industry, 50 percent of cameras, 30 percent of TVs, 30 percent of air conditioners, 25 percent of washing machines, and 20 percent of refrigerators are produced or assembled in China. Databeans estimates that China also produces well over one third of global mobile phones, 17 percent of digital cameras, 20 percent of DVD players, and 28 percent of broadband routers and modems.

Electronic News, a sister publication of EM Asia