Semiconductor sector grows quickly
By Chen Qide (China Daily)
Updated: 2004-08-18 09:30

China's semiconductor industry is expected to witness faster growth as more projects are launched in the next five years, according to Xu Xiaotian, secretary-general of China Semiconductor Industry Association.

There has been an investment of more than 100 billion yuan (US$12.1 billion) injected into the industry in the last two decades to develop integrated circuits (IC) and software.

The investment, which is expected to increase by an additional 50 billion yuan (US$6 billion) by 2005, will be doubled by 2010 to reach 300 billion yuan (US$36.3 billion), Xu said.

Xu came to Shanghai last weekend to make preparations for IC China 2004, an international IC exhibition to be held at Shanghai Everbright Convention and Exhibition Centre on September 1.

"The three-day event is considered a platform for Chinese and foreign IC and software manufacturers and designers to seek opportunity for co-operation," he said.

Of the 100 billion yuan (US$12.1 billion) investment injected in the past 20 years, 80 per cent has been from overseas.

The proportion, he said, indicates that the projects to be launched between 2005 and 2010 will mostly be funded by overseas investors.

Some projects will be expansion to current plants, while some will be newly launched. Intel, for example, will invest in China to build new packaging and testing production lines.

"The large influx of foreign investment means that the Chinese IC and software market has a huge potential for expansion," he said.

Insiders said that with these investment inputs, China would be able to occupy eight per cent of the world's IC sales by 2010. Its current percentage is only two per cent.

As a trade watchdog, Xu said, the association will help some Chinese enterprises to be listed at stock exchanges to collect funds for further expansion.

Meanwhile, it will bridge co-operation with overseas investors, he said.

At present, nearly all the world's well-known semiconductor giants, such as Motorola and IBM, have got firm footholds in the Chinese market.

"We have found that more small and medium-sized companies in the world are showing strong interest in China's semiconductor industry," he said.

They hope to launch auxiliary projects to produce raw materials, deal with sewage disposal and manufacture accessory parts for the IC and software industry.

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