CCID Consulting: Growth of China's IC Industry Slows with a Growth Rate of 9.7% in 2011

BEIJING — (BUSINESS WIRE) — May 2, 2012 — CCID Consulting (HKSE: 08235):

The global semiconductor market lacked momentum in 2011.

By the end of 2011, the global semiconductor market was valued at $300.94 billion, with a slight growth of 0.88% year-on-year.

Figure 1 Size and Growth of Global Semiconductor Market, 2007-2011
Source: SIA, collated by CCID Consulting, February 2012

In 2011, the world's semiconductor product structure experienced the following slight changes: market shares of sensors and discrete devices kept rising, with a growth rate of 17.43% and 10.94% respectively; however, IC experienced a slight shrink, mainly due to the price falls.

Figure 2 Product Structure of Global Semiconductor Market, 2011
Source: SIA and WSTS, collated by CCID Consulting, February 2012

China's IC Market Size grew by 9.7% in 2011.

Affected by different factors at home and abroad, the sales revenue of China's IC market slightly grew by 9.7%, which still outplayed the global market.

Figure 3 Sales Revenue and Growth Rate of China's IC Market, 2007-2011
Source: CCID Consulting, February 2012

In terms of product structure, the market share of memory reached 21.3% in 2011, almost 3% down from 2010, The loss was attributable to the following two reasons. First, the mainstream PC DRAM products suffered a 50% fall in their prices in 2011. Second, the bankruptcy of Japan's Elpida caused a new round of integration and merger and further enhanced the giant players’ monopoly power in the memory market. In contrast to the DRAM products, the NAND Flash products, driven by the popularization of smart phone, Pad and MID, witnessed a soaring growth in their sales volume. Under such circumstances, the memory market decreased by 3.1% in 2011 year-on-year. Besides, the market share of ASSPs increased, while CPU’s output experienced a fast growth, owing largely to the rapid increase in China's laptop output in 2011.

Figure 4 Product Structure of China's IC Market, 2011
Source: CCID Consulting, February 2012

In terms of application structure of China’s IC market, computer, telecommunication and consumer electronics remained the dominant application fields in 2011, with a combined market share of 87.5%. The computer-related IC market continued to see a stable growth in 2011, with an annual growth rate of 9.2%. Meanwhile, IC card overtook automotive electronics to become the fastest-growing application field in 2011.

Figure 5 Application Structure of China's IC market, 2011
Source: CCID Consulting, February 2012

As for brands, Intel was still the top brand in China's IC market. Hynix Semiconductor, stuck to the third place, experienced a 12% decrease in its market size growth due to the price falls of memory products. Renesas, whose MCU production for automotive electronics was affected by the East Japan earthquake, saw a 2.8% decrease in its growth rate. Qualcomm was ranked among the top ten in China's IC market with a growth rate of over 30%, thanks to the rising popularity of its mobile terminal products.

Figure 6 Brands of China's IC market, 2011
Source: CCID Consulting, February 2012

Development trends of China's IC market

In the future, China's IC market is expected to maintain a grow rate of 9%, mainly driven by the development of electronic products like PC, mobile phone and LCD TV. In addition, the development of emerging sectors such as Internet of things, cloud computing, new energy, semiconductor lighting, medical electronics and security electronics will provide new momentum for China's IC market.

In terms of technology, the 22nm chip is supposed to begin commercial sale next year, while the R&D of 14nm chips has already commenced. The processors will largely adopt the multi-core architecture, and new 22nm processor products will emerge. The memory products will also see smaller dimensions and more advanced packaging.

Figure 7 Size and Growth of China's IC Market, 2007-2014
Source: CCID Consulting, February 2012

About CCID Consulting Co., Ltd.

CCID Consulting Co., Ltd., the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to 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, Xi’an, Wuhan and Nanjing with over 300 professional consultants. The company’s business scope has covered over 200 large and medium-sized cities in China. CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services, investment and financing, and M&A. The company's customers range from government departments at all levels and diversified industrial parks, to industrial users in strategic emerging industries in new generation information technology, energy saving and environmental protection, biological science and technology, high-end equipment manufacturing, new materials, and new energy. CCID Consulting commits itself to become the No. 1 advisor for urban economy, the No.1 consultancy for enterprise management, and the No. 1 brand for informatization consulting in China.

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