Chinese Analog IC Market to Grow During Difficult Year

IMS Research explains the market condition of the Chinese analog and data converter ICs market.

The latest data from IMS Research predicts the Chinese market for analog and data converter ICs will slow in 2009 from levels seen in previous years. However, this relative slow growth is still a boon for the industry given that the global semiconductor market is under severe recession.

In 2008, the Chinese market for analog and data converter ICs was estimated to be worth US$3.9 billion (measured by invoice location). During 2009 the market is forecast to grow 8 percent to around $4.2 billion, notably slower than the year-on-year double-digit increases seen in the previous five years.

Strong demand from consumer and computer sectors has been the primary driving force to the Chinese analog ICs market over the past few years. As the demand from these sectors weakens during the period of global financial turmoil, the market growth rate will be lower than normal. However, IMS Research predicts that non-consumer sectors such as wireless basestation, security and non-commodity power supplies will sustain growth. The financial turmoil could be a good opportunity for end-equipment manufacturers who are able to provide price competitive products. Manufacturers from low cost regions (e.g. mainland China and Taiwan) are expected to expand their market share during this period.

The Chinese analog IC market will also benefit from a strong governmental push linked to the real economy. “While IMS Research believes that the year of 2009 will be a difficult year for the Chinese analog IC market, several governmental programs will be helpful to the market. For example, Infrastructure investment, restructure of telecom carriers and ‘home appliances to the countryside scheme' will help maintain positive growth in the analog IC market,” IMS Research analyst Reggie Li said.