IC demand in Mainland China to increase 23%

Growth fuelled by communications, consumer electronics and computersDemand for integrated circuits (IC) in China is expected to increase 23 per cent this year, with growth mostly coming from computer, communications and consumer electronics segments, according to a study by trade publisher and online marketplace Global Sources.Integrated circuit consumption on the mainland will reach about US$30 billion this year, of which 95 per cent will have to be satisfied with imports."Growth of China's electronics manufacturing industry far outstrips the speed of development of its IC and component manufacturing sectors," said Electronics Industry Outlook: China.The trend towards more sophisticated products fuels demand for highly complex ICs.However, the mainland's domestic IC design houses' ability to deliver these components is limited. "China is expected to rely heavily on imports of complex ICs for at least another decade," the study said.Sales of the mainland's electronics manufacturing industry have been projected by the Ministry of Information Industry (MII) to grow by 17 per cent to US$198 billion this year, following 17.8 per cent growth to US$169 billion last year.Consumer electronics will continue to figure prominently in the picture.IC consumption in consumer electronics manufacturing will increase 12 per cent to 13.5 billion pieces this year, while in computer manufacturing it will grow 11 per cent to 11.4 billion pieces.The communications segment will take up another 8.2 billion ICs, or 16 per cent more than last year.The mainland's electronics manufacturing industry exports 55 per cent of its products, mainly for consumers.In the domestic market, competition between local and foreign brands will be a "close race", according to the study's executive editor, Vivek Nanda. "In mobile phones, the designs by local and foreign brands are increasingly similar, yet the domestic products are cheaper," said Mr Nanda.He said foreign brands would concentrate primarily on export markets and target the mainland's population with buying power.In the TV set segment, local manufacturers will have a large chunk of the domestic and particularly rural market. Foreign brands will dominate urban markets for high-end products.Mr Nanda said the recent move by foreign brands to slash prices of high-end products should boost their urban market shares.Source: South China Morning Post