1. Fast market growth continued and sales revenues reached 486.25 billion Yuan (about 63.15 billion USD).
According to CCID Consulting, China's IC sales revenues reached 486.25 billion Yuan (about 63.15 billion USD) in 2006, up by 27.8% year-on-year. In spite of the rather high market growth, drops in growth rate in three consecutive years nevertheless indicated that China's IC market has passed the initial periods of fast growth and started to enter a period of stable growth.
For figure "Sales Revenues and Growth in China's IC Market, 2002-2006", please refer to http://www.ccidconsulting.com/upload_fr/070327/image01.gif .
2. Network communication IC drove up overall market growth.
In 2006, computer IC, communication IC and network communication IC accounted for 88.5% of China's IC market. Computer IC continued to get the most market shares, while communication IC grew the fastest. As for communication products, the IC demand mainly came from mobile phones and some other products. In 2006, the output of mobile phones, WLAN APs, routers, mobile programmable switches, DSL terminals and VOIP equipment in China all grew by over 40%. The fast growth of downstream products directly drove up the growth of China's communication IC market, which was up by 39.6%. Among computing products, the main demand for IC came from PCs, notebooks, printers, displays, keyboards and mice. Fierce competition resulted in a continuous drop in product price. To a certain extent, this affected the growth of the computer IC market. The demand for consumer IC mainly came from new digital consumer products, such as MP3, MP4 and DVD players as well as digital cameras. Compared with the fast growth in 2005, there was a certain drop in the output of whole system products in 2006. This was the reason why the consumer IC market grew slower than the computer and communication IC market.
For figure "Application Structure of China's IC Market in 2006", please refer to http://www.ccidconsulting.com/upload_fr/070327/image02.gif .
3. Storage continued to get more market shares.
Different from 2005, when growth was driven by NAND Flash, DRAM became the main driving force in 2006. In 2005, DRAM vendors such as Samsung and Hynix turned some of their production capacities to make NAND Flash. Also, there was a growth in the demand for DRAM from PCs and various portable products. These factors resulted in a shortage of DRAM supply and rising product prices at one stage in 2006. China's DRAM market grew by 50% during 2006, while the price of NAND Flash dropped by over 60%. Additionally, thanks to the big increases in the output of mobile phones and portable equipment, ASSPs and analog products also grew by over 30% in 2006. The CPU market also grew rather fast. However, due to fierce competition between AMD and Intel, there was a fast fall in processor prices. As a result, the CPU market grew slower than the PC market.
For figure "Product Structure of China's IC Market in 2006", please refer to http://www.ccidconsulting.com/upload_fr/070327/image03.gif .
4. Storage makers performed well, while Hynix rose to 3rd place.
As compared with 2005, the year 2006 did not see many new faces in the top 10 vendors of China's IC market, with only Infineon being replaced by Qimonda, a firm that spun off from Infineon. However, market rankings changed rather significantly. Storage makers continued to get more market shares, as well as better market rankings. Hynix was the biggest winner in China's IC market in 2006. It rose to 3rd place in the rankings, changing the long fixed makeup of the top 3 firms in the Chinese market. Its 46.1% growth benefited from the pull by the DRAM market. Intel continued to keep its top position. Despite a drop in its global sales, it still maintained growth in China thanks to big PC and notebook shipments, but its market share of 16.2% marked a fall from last year. Samsung was still ranked 2nd. Due to falling NAND Flash prices in 2006, its growth fell below expectations. Nevertheless, it grew faster than the market as a whole. After acquiring ATI, AMD saw its ranking rise to 5th place. In 2006, AMD continued to take market shares away from Intel in the processor field, extending its good growth momentum in 2005. Following the acquisition of ATI by AMD, and the ensuing task of integration, it has yet to be seen whether ATI's previous businesses will be affected.
For figure "Brand Structure of China's IC Market in 2006", please refer to http://www.ccidconsulting.com/upload_fr/070327/image04.gif .
5. Market growth will slow down over the next 5 years, but market size will top 1 trillion Yuan (about 129 billion USD) in 2011.
In 2007, CCID Consulting believes that China's semiconductor market will continue to grow, but will be slower than in 2006. The main reason is that the output of whole systems at the downstream will fall after many years of fast growth. This will slow down the upstream chip market. In the next few years, there will continue to be notable growth points in China's IC market. These will include 3G and DTV. However, this can only bring about internal product upgrading in certain fields, but will hardly create a big output increase for downstream products. As China's 3G market kicks off, it will stimulate a big rise in the demand for 3G mobile phones. Nonetheless, the kick-off is unlikely to bring a big increase in mobile phone (including 2G and 3G) output. This may increase the percentage of 3G mobile phones. Consequently, it will be very difficult for mobile phone output to grow by over 50%. As whole system output at the downstream falls, China's IC market is bound to slow down in the future. This also further indicates that the market has gradually passed the initial periods of introduction and fast growth and started to enter a stage of stable growth. In the next 5 years, its growth will slowly approach that of the global IC market.
For figure "Forecast for Size and Growth of China's IC Market, 2007-2011", please refer to http://www.ccidconsulting.com/upload_fr/070327/image05.gif .
Despite a gradual slowdown, China's IC market as a whole will continue to grow faster than the global market over the next 5 years. Between 2007 and 2011, its CAGR will reach 17.6%. By 2011, the market is expected to reach 1.0954 trillion Yuan.
About CCID Consulting
CCID Consulting Co., Ltd (also 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: HK08235), is a direct affiliate of 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 and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
Based on four major competitive areas of the powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://www.ccidconsulting.com/default_e.asp .
For more information, please contact: Grace Gao Tel: +86-10-8855-9020 Email: Email Contact