AUGUST 21--According to the report Mainland China's Semiconductor and Equipment Markets: A Complete Analysis Of The Technical, Economic, and Political Issues, recently published by The Information Network (New Tripoli, PA; www.theinformationnet.com), a market research company, demand for ICs and equipment in mainland China is exceptionally strong and will continue to exhibit positive growth between 2001 and 2005. This 260-page report analyzes mainland China's semiconductor and equipment industries, examining the technical, economic, and political issues that are shaping this nascent industry. Markets are forecast from 2000 to 2005.
In 2000, the country produced 5.9 billion chips, which accounted for just 27% of domestic demand. Most high-end products used in computers and mobile phones had to be imported. Domestic semiconductor companies also had to import designs from overseas companies. Help has come from global companies such as Motorola, Infineon, NEC, Mitsubishi, STMicroelectronics, Philips, and Toshiba, which are transferring technology, investing capital, building wafer fabs, and forming joint ventures with Chinese partners.
The semiconductor industry in mainland China is positioned for explosive growth in fab construction, leading to tremendous opportunities for semiconductor-equipment and materials suppliers. In China's tenth five-year development plan, 25 new advanced fabs are earmarked. Nevertheless, by 2005 Chinese-produced semiconductors will not keep up with demand. Only 23% of chips needed to meet demand for an ever-increasing amount of consumer electronics, telecommunications, and computing production in China will be domestically manufactured. China is lagging far behind the leading industrialized countries in chip production.
Demand is so strong for ICs that the country will not be impacted by the semiconductor downturn plaguing every other country in the 2001--2002 period. Tied to the surging market will be strong demand for processing equipment.
The front-end semiconductor equipment market was less than $500 million in 2000, but will exhibit nearly a 30% growth rate through 2005, significantly better than any other geographic region.