With a continuing shift in manufacturing and rising demand for electronic consumer goods and mobile communications gadgets, China became the largest consumer of integrated circuits (ICs) last year. According to market research firm IC Insights' new McClean Report 2006, China's IC market grew 32% to $40.8 billion in 2005 (see figure), making it, for the first time ever, the largest regional IC market in the world, surpassing the United States and Japan. The 32% increase was much greater than the 8% growth rate the total worldwide IC industry displayed last year. By 2010, the Scottsdale, Ariz.-based research firm predicts that the China’s overall IC consumption will more than triple to reach a dramatic value of $124 billion.

The report indicates that last year China represented 21% of the world's $192.4 billion in IC consumption, up from 6% in 2000. Amazingly, as recently as 2000, the Americas IC market was more than five times the size of China's IC market.

Although its consumption of ICs has risen dramatically in past few years, China’s home-grown ICs remain relatively small. IC Insights states that a clear distinction should be made between the IC market in China and indigenous IC production in China. While China was the world’s largest market (i.e., consuming country) for ICs in 2005, it does not necessarily mean that huge amounts of IC production in China will immediately follow. The indigenous IC production was only about $2.6 billion in 2005, but it is expected to continue to grow strong through 2010. The report forecasts that China-based IC production will rise to $12.1 billion in 2010, representing a 36% compound annual growth rate (CAGR) from 2005-2010. It should be noted that even after such meteoric growth, China-based IC production would still represent only 4% of the total forecasted $319 billion worldwide IC production in 2010, according to the market report. In fact, the $12.1 billion worth of local Chinese IC production would be only about 10% the size of the $124 billion Chinese IC market forecast for 2010.

According to World Semiconductor Trade Statistics (WSTS), Asia Pacific continues to be seen as the fastest growing region. And is set to achieve annual growth rates of 11.7% this year and 12.4% in 2007.

RSS    Save to Del.icio.us  Digg This