- 12 January 2006 -

China the largest IC consumer in 2005; but still only 4% share of global production by 2010

China ’s IC market grew 32% to $40.8bn in 2005, making it, for the first time ever, the largest regional IC market in the world, according to IC Insights' McClean Report 2006. The 32% increase was much greater than the 8% growth rate the total worldwide IC industry displayed in 2005.

From 2000 through 2005, the Chinese IC market registered a compound annual growth rate (CAGR) of 33%, compared to -8% for the Americas. In 2005, China represented 21% of the world’s $192.4bn in IC consumption, up from 6% in 2000. As recently as 2000, the Americas IC market was more than five times the size of China’s.

But IC Insights stresses that a very clear distinction should be made between the IC market in China and indigenous IC production in China. Although China was the world’s largest market (i.e. consuming country) for ICs beginning in 2005, it does not necessarily mean that huge amounts of IC production in China will immediately follow.

Overall, the growth rate of China-based IC production is likely to be very strong through 2010. But, considering that China-based IC production was only about $2.6bn in 2005, this growth will come from a small base. It will rise to $12.1bn in 2010 (a 36% 2005-2010 CAGR). But even after such meteoric growth, this would still represent only 4% of the total $319bn worldwide IC production forecast. Moreover, it would be only about 10% of the $124bn Chinese IC market.