According to the latest ranking of the top 10 semiconductor manufacturers in the Chinese market by market research firm iSuppli , Intel has always been the top player in the Chinese semiconductor market, as it dominates the PC microprocessor market. Texas Instruments, which ranks second, has achieved higher growth in the digital signal processor (DSP), analog and logic markets, as it has large and well-known customers including major OEMs such as Nokia and Huawei. The growth of semiconductor demand in China "significantly slowed down" in 2005, but STMicroelectronics and Samsung Electronics both increased their market share in China that year. STMicroelectronics' ranking in the Chinese chip market rose from fourth in 2004 to third in 2005, and its sales in the Chinese market increased by 21% over 2004 to US$1.8 billion. iSuppli said in a statement: "STMicroelectronics' outstanding performance is due to its successful restructuring and growth in emerging product areas in China, such as digital set-top boxes." iSuppli pointed out that STMicroelectronics also benefited from the relatively weak performance of its European peer Philips Semiconductors. Samsung Electronics of South Korea also rose in the ranking of the Chinese market in 2005, from the fifth place in 2004 to the fourth place. In 2005, Samsung Electronics' semiconductor sales in the Chinese market increased by 28% over 2004 to US$1.7 billion, the largest increase among the top 10 semiconductor suppliers that year. iSuppli said that Samsung Electronics' ranking rose because of the growth of its memory business and the expansion of its share in the microcontroller field. Philips Semiconductor's ranking dropped to fifth from third in 2004, while Japan's Toshiba achieved modest growth and remained in sixth place. iSuppli said: "Philips' past strength in sales of CRT monitors and TVs appears to have become a liability as these markets have shifted to LCD technology." According to iSuppli, China's overall semiconductor demand reached 37 billion US dollars in 2005, an increase of about 12.8% over 2004. However, it pointed out that the growth rate of China's semiconductor demand in 2004 was as high as 34.9%, which means that the growth rate of demand slowed down significantly in 2005, and the problems in the supply chain continued to increase. iSuppli said that China's semiconductor demand has grown rapidly every year in the past 20 years, so it is not surprising that the growth has slowed down slightly as the demand base has increased. iSuppli said that the decline in the growth rate of the Chinese market has been a major trend for major global semiconductor manufacturers in recent years. However, small and medium-sized chip suppliers such as MediaTek, Trident, MStar and Actions achieved a growth rate of more than 40% in the Chinese market in 2005. These companies are becoming new growth drivers in the industry. iSuppli predicts that these companies will maintain their growth momentum in 2006. iSuppli said China's semiconductor demand was strong in the first quarter, but in the second quarter, inventories in the mobile phone supply chain and consumer electronics products such as DVD players and digital set-top boxes, which are mainly produced in China for export, rose. "The European RoHS product certification process took effect in July and has also begun to affect the export of electronic products produced in China," iSuppli said. "At the same time, because the Chinese government has been slow to issue 3G licenses, Chinese telecom operators are reluctant to increase capital expenditures. This means that with uncertainty in the domestic market, China's large telecom equipment manufacturers must rely on export sales." iSuppli predicts that China's semiconductor demand will grow 18% in 2006. "While this growth rate is lower than in the past few years, it is still a very strong number," the company asserted. |