CCID Consulting: China’s IC Market Shrinks for the Fifth Consecutive Year

2009-02-27 18:20 2197

BEIJING, Feb. 27 /PRNewswire-Asia/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China’s IC market.

The Sales Volume of China’s IC Market Reached 597.33 Billion Yuan; the Market Decreased for the Fifth Consecutive Year

The sales revenue of China’s IC market in 2008 reached 597.33 billion Yuan. The growth rate of China’s IC market significantly slowed down in 2008, and the growth rate was 6.2%. This is for the first time a

single-digit growth was recorded for China’s IC market; and although it still maintained positive growth, the growth rate has been decreasing for the past five years. After many years of high growth rate, the growth rate of the whole machines’ output in China has saturated; as for notebook computers and LCD TV products, although a high growth rate was recorded in 2008, the growth rates of most products have stabilized or showing a downward momentum, which will be directly reflected in the upstream IC market; therefore, from another point of view, the recession of the IC market also reflects the whole machine industrial development’s slowdown.

Figure 1: Sales Revenue & Growth Rate of China’s IC Market, 2004-2008

Source: CCID Consulting, Feb. 2009

Computer, Consumer and Network Communications Account for 87.8% of China’s IC Market

In 2008, computer, consumer and network communications account for 87.8% of China’s IC market; thereinto, computer has the largest market share; its demands for electronic information products, such as IC are mainly from PCs, notebook computers, printers, display, keyboards and mouses; although the output of many products are decreasing, notebook computer’s high growth rate drives the relative development of China’s computer IC market in 2008, with a growth rate of 7.9%. The market for communication products is weakening: affected by a slowdown of mobile phones and other communications products, the growth rate of China’s network communications IC market in 2008 was 2.6%. Consumer IC’s growth rate was steady. Industry control’s development is steady, with the promotion of security products in 2008, industry control’s growth rate was 10.5%. Besides, because of a shrink in the second generation ID cards, IC has negative growth. Automotive IC remained the field with the rapidest growth, but its growth rate had significantly slowed down.

Figure 2: Application Structure of China’s IC Market in 2008

Source: CCID Consulting, Feb. 2009

Memory still had the Largest Share, the Growth Rate of Analog IC Slowed Down

With regard to product structure, memory still had the largest share, benefiting from the growth of notebook computers output, and the high growth rate of CPUs and the computer peripheral market. Memory always has the largest share in China’s IC market. However, memory price has been experiencing large fluctuation in recent years. Since 2006, as prices of DRAM and NAND FLASH went down all the way until 2008. Large output investment failed to deliver the expansion of sales revenue to vendors. And as prices of memory dropped, sales revenue declined even with a growth in output. As the product with the largest share in China’s IC market, the fall in memory prices directly restricted the development of the whole IC market.

Figure 3: Products Structure of China’s IC Market in 2008

Source: CCID Consulting, Feb. 2009

The Overall Competition Pattern Was Steady, Memory Vendors’ Shares Decreased

In 2008, TOP 10 vendors in China’s IC market remained stable, but compared to 2007, the ranking had slightly changed; thereinto, after ST acquiring NXP’s wireless communications service, ST’s ranking moved one position from previous year, and NXP’s ranking declined one position from previous year. With regard to share, Intel still had the largest market share; affected by memory prices’ drop, the shares of Samsung and Hynix declined; thereinto, the sales revenue of Hynix declined significantly. Affected by an unfavorable market environment, TI had slow development, but IT still had positive growth in China’s market; although affected by memory price drop, the sale of Toshiba’s other chips was strong, and Toshiba expanded slightly in China’s market; MTK still maintained double-digit growth, but compared to 2007, the growth rate went down significantly. After the top 10 rankings, affected by depressed industry and DRAM’s price drop, Qimonda’s sales revenue had large-scale decline; Qualcomm and Broadcom had rapid development in China’s market, which entered top 20 vendors in China’s IC market.

Figure 4: Brand Structure of China’s IC Market in 2008

Source: CCID Consulting, Feb. 2009

In 2009, the Market Will Continue to Slump, the Market Development Slow Down

In recent years, development of the global IC market has been slow. Affected by a slowdown in production capacity transfer, unfavorable industry and the whole machine demands’ slowdown, China’s IC development slowed down year by year. In 2008, affected by these factors and the financial crisis, the market experienced a single-digit growth for the first time. The impact of the financial crisis’s will expand in 2009, and it is expected the market would remain weak, that compared with 2008, the market’s development speed will further decline in 2009. Given a recovery in global economic conditions in 2010, China’s IC market is expected to improve. In 2010 and 2011, the growth rate of China’s IC market will reach 10%.

Figure 5: Forecast on the Size & Growth Rate of China’s IC Market, 2009-2011

Source: CCID Consulting, Feb. 2009

Judging from the long-term, with China’s IC market size’s continuous enlargement, it will continuously improve its proportion of the global IC market. China’s IC market’s development will become milder. Judging from the present situation, China’s IC market has experienced rapid development period, its growth rate will stay close with the global IC market in the future.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.

Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.

For more information, please contact:

Cynthia Liu

Coordinating Manager

CCID Consulting Co., Ltd.

Tel: +86-10-8855-9080


Source: CCID Consulting Co., Ltd.
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