Ron@Maltiel-consulting.com - Semiconductor & Patent Expert Consulting

RMG and Associates

Providing Silicon Valley Semiconductor Consulting

(408) 446-3040

_____________________________________________________________________________________________________________________________________________

 

China's Semiconductor Industry

Articles:

1.Top 29 Chinese Semiconductor Firms, According to PwC

2. Shakeout looms for Chinese chip firms, iSuppli says / EETimes

3.Study: China consumed one-third of chips in '07 / EETimes

4. Rankings: Top chip sellers in China for '07 /EETimes

5. China foundries HHNEC and GSMC expected to finalize merger talks next month /DigiTimes

 

_____________________________________________________________________________________________________________________________________________

1. Top 29 Chinese Semiconductor Firms, According to PwC

Rankings: A peak inside China's chip industry

 

The full report is at China’s impact on the semiconductor industry .

 

SAN FRANCISCO—A recent report from consulting firm PricewaterhouseCoopers (PwC) provides a rare glimpse inside China's semiconductor industry, offering a ranking of 29 indigenous Chinese chip firms with 2007 revenue greater than $30 million, according to the firm.

Chip foundry Semiconductor Manufacturing International Corp. (SMIC) is generally regarded as China's leading semiconductor company, with 2007 revenue of more than $1.5 billion.

But PwC's list excludes foundries, defining it as a ranking of indigenous Chinese companies that design, manufacture (or have manufactured by a third-party), market and sell chips.

According to the PwC report, the top indigenous Chinese chip company for 2007 was HiSilicon Technologies Co. Ltd., with revenue of about $170 million. HiSilicon Technology is the former chip R&D center of the Huawei Co. that was spun out in 2005, according to PwC.

 

 

Top

_____________________________________________________________________________________________________________________________________________

2. Shakeout looms for Chinese chip firms, iSuppli says

 
SAN FRANCISO—There are more than more than 550 fabless semiconductor companies competing in China today, but more than 100 of them will disappear within two years, according to market research firm iSuppli Corp.

"Many companies presently are seeking buyers and a total of four companies already have been acquired by foreign semiconductor firms during the past 12 months," said Vincent Gu, China research analyst at iSuppli (El Segundo, Calif.) "China's fabless IC industry is polarized with about 50 companies achieving success and the remainder struggling to survive."

Most of China's fabless companies are young and small, iSuppli said, and more than 88 percent will generate less than $10 million in revenue during 2008.

"Some companies are losing money and have no mature products available to deliver the revenues needed to continue doing business," Gu said. "Most companies have announced layoffs, cut production lines or have shut down entirely."

After years of double-digit annual growth, China's semiconductor sales revenue in 2008 is expected to rise by only 6.7 percent to reach $81.7 billion, up from $76.6 billion in 2007, iSuppli predicts. But China's fabless IC industry is expected to perform better, by 12.3 percent to reach $3.5 billion in 2008, the firm said.

"This growth in fabless IC revenue is being driven by domestic sales of wireless and consumer electronics products, rather than by exports," Gu said.

China's domestic market situation improved in 2008 despite regulatory restrictions and an incomplete supply chain, according to iSuppli. Popular applications supporting new domestic standards will appear in 2009 as the country's industrial ecosystems mature, the firm said.

Continued revenue growth for China's IC industry is anticipated in 2009, despite substantial economic uncertainty, iSuppli said.

The majority of China's semiconductor firms are short of capital and face cash flow problems, iSuppli said. The launch of an alternative stock market in Shenzen has been postponed due to the global economic financial crisis, iSuppli said, and venture capitalists generally lack interest in China's IC industry. But iSuppli expects at least five companies will seek initial public offerings on the Nasdaq stock exchange and at least 10 companies will be involved in mergers next year.

A new iSuppli report, Semi Suppliers of Leading OEMs: A Closer Look at Risk Management, is now available through the firm's web site.

A separate report issued Tuesday by consulting firm PricewaterhouseCoopers conculuded that semiconductor consumption by electronics manufacturers in the Chinese market grew by 23 percent in 2007, when China consumed more than a third of the chips produced globally for the first time.

Top

_____________________________________________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________________________________

3.Study: China consumed one-third of chips in '07


 
SAN FRANCISO—Semiconductor consumption by electronics manufacturers in the Chinese market grew by 23 percent last year, when China consumed more than a third of the chips produced globally for the first time, according to a report released Tuesday (Nov. 18) by PricewaterhouseCoopers (PwC).

Driven by growth in electronics manufacturing, China has become the dominant consumer of semiconductors with the total consumption estimated at $88 billion in 2007, according to the report, China's Impact on the Semiconductor Industry: 2008 Update.

"Semiconductor consumption in the Chinese market is growing at a faster pace than what the industry anticipated," said Raman Chitkara, global semiconductor leader at PwC, in a statement.

But growth in semiconductor production in China is not keeping pace with consumption, Chitkara added. "While the Chinese government is implementing initiatives in the hope of increasing local production, we predict that this disparity is likely to continue in the near future," Chitkara said.

Growth in exports is the dominant driver of consumption of semiconductors in China, according to the report. About 69 percent of chips consumed in China in 2007 were used in various electronics products manufactured for export, up from 64 percent in 2005, it said.

The Chinese semiconductor industry remains widely scattered with no dominant players, PwC said. This is likely to change as the Chinese semiconductor industry further matures within the next five years with the likely emergence of a dominant player in the market, the firm said.

This assumption contrasts with the opinion advanced by Bill McClean, president of market research firm IC Insights Inc. Earlier this year McClean questioned China's commitment to semiconductor manufacturing as some of the country's top chip makers have hit the skids.

Silicon foundry Semiconductor Manufacturing International Corp. (SMIC) is the largest manufacturer of chips in China and the fourth-ranked foundry in the world by revenue. But SMIC has struggled in recent quarters, leading to speculation about its future. Last week it received a $172 million investment from Datang Telecom Technology & Industry Holdings Co. Ltd.

China's Impact on the Semiconductor Industry lists the top Chinese semiconductor companies but excludes wafer foundries because they don't design and sell chips as their own. According to the PwC report, the top indigenous Chinese chip company for 2007was HiSilicon Technologies Co. Ltd., with revenue of about $170 million.

The revenue threshold for PwC's ranking of the largest Chinese semiconductor companies increased from $20 million in 2005 to $30 million in 2007, yet the number of qualifying companies remained at 29, according to the report.

The report says Chinese chip companies are often overlooked in semiconductor market share reports compiled by industry analysts.

According to the PwC study, buying decisions for semiconductors consumed by the electronics manufacturing industry in China are often made outside the country in places like Taiwan and Japan. PwC said it predicts that as the Chinese industry matures, this business practice will diminish, benefiting the companies with greater local presence in China.

While many of the largest semiconductor suppliers to the Chinese market are multinational companies, 32 of the top 70 global suppliers have below average market penetration in China, the fastest growing semiconductor market in the world, according to the report.

"Over the near term, established multinational semiconductor companies may find an unparalleled market opportunity in China, but over the long term the widening gap between consumption and production of semiconductors represents a domestic industry void that will inevitably be filled," Chitkara said.

Top

_____________________________________________________________________________________________________________________________________________

4. Rankings: Top chip sellers in China for '07

 
SAN JOSE, Calif. -- IC consumption in China grew by 23 percent last year.

In fact, China consumed more than a third of the chips produced globally for the first time last year, according to a report released by PricewaterhouseCoopers (PwC).

So, in 2007, who were the winners--and losers--in terms of chip makers selling into the Chinese market? Intel Corp. led the pack, but Toshiba Corp. and Qualcomm Inc. gained ground, according to the rankings.

Top

_____________________________________________________________________________________________________________________________________________

5.China foundries HHNEC and GSMC expected to finalize merger talks next month



Claire Sung, Taipei; Jessie Shen, DIGITIMES [Monday 1 December 2008]

Shanghai Integrated Circuit Industry Association (SICA), a semi-official government organization in China, has claimed that local foundries Hua Hong NEC (HHNEC) and Grace Semiconductor Manufacturing Corporation (GSMC) are likely to finailize merger talks by Lunar New Year next month.

HHNEC and GSMC have expressed interest in a potential merger, with market speculations having emerged since November 2005.

The HHNEC-GSMC consolidation has seen active involvement and support from government bodies in Shanghai, according to SICA Secretary-general Jiang Shoulei. The merger talks kicked off 2-3 months ago, and the terms will be finalized by Lunar New Year at the earliest, Jiang said. The integration between the two companies is expected to be enhance economies of scale and use of resources, Jiang stated.

HHNEC, which has been employed in several government projects, specializes in solutions for SIM cards, radio-frequency identification (RFID) and microcontroller (MCU) applications. The company currently has two 8-inch fabs, with a total monthly capacity of 60,000 wafers, company sources indicated. Major shareholders of HHNEC include Japan's NEC and the Hua Hong group.

GSMC's monthly capacity reaches 35,000 wafers at its Shanghai base, according to company sources

Top

_____________________________________________________________________________________________________________________________________________