China's integrated circuit industry see sizzling profits

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Last updated at: (Beijing Time) Monday, October 27, 2003

China's integrated circuit industry see sizzling profits

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China's integrated circuit (IC) industry is expected to maintain an annual growth rate of more than 30 per cent on average in the coming three years, according to senior officials at the 2003 China Information and Technology Industry Forum.

Xu Xiaotian, secretary-general of the China Semiconductor Industry Association, made the prediction at the two-day event, held over the weekend in Changzhou, East China's Jiangsu Province.

The forum was sponsored by the Information Industry Department of Jiangsu Province and the Changzhou's city government.

By 2005, the country is expected to turn out 20 billion chips, with a total sales of 60-80 billion yuan (US$7.3-9.7 billion), according to Xu.

The annual output by 2010 is to hit 50 billion chips, with a sales value of around 200 billion yuan (US$24 billion) or 5 per cent of the world's market, he said.

"Our forecasts, though slightly aggressive, are still fairly objective and achievable," Xu said.

China's fast growing consumer electronic sectors, involving mobile phones and personal computers, will give a big push to demand for IC products in the coming years, he said, adding that China has become the world's third largest IC market after the United States and Japan.

Despite global IC market fluctuation, China's chip industry has kept robust growth momentum since the late 1990s.

In 2001, the country witnessed a year-on-year 8 per cent growth of chip output though global chip production shrank more than 30 per cent, association statistics showed.

In 2002, the country's total chip output reached 9.6 billion sets and the sales totalled 26.8 billion yuan (US$3.2 billion), a hefty 42 per cent growth over the previous year.

Currently, a complete IC industry "chain line" has been formed in Jiangsu Province and the Yangtze River Delta region with Shanghai as its centre. It dominates the country's IC manufacturing by putting out more than 80 per cent of the total chips, said Xu Kai, vice-director of the Information Industry Department of Jiangsu Province.

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