CCID Consulting recently released a report by its Semiconductor Industry Research Center, on the development of China's IC Industry in Q1. Entering 2007, the global semiconductor market notably showed a trend of lack of reserve strength for growth.

Meanwhile, affected by product structural adjustment and intensified market competitions, China's electronics information industry also slowed down, with falling returns. Affected by these two factors, China's IC industry notably slowed down.

Statistics show that the total domestic IC output between January and March reached 8.529 billion pieces, up by 12.3% year-on-year. The sales revenues in the whole industry totaled 27.121 billion RMB, up by 27.4% year-on-year. Compared with 2006Q4, there was a drop of 8.7% in growth rate.

In 2007Q1, the 3 major industries in IC design, chip making, packaging and testing were all affected by the slowdown in market growth at varying degrees. Among them, the packaging and testing industry was most notably affected. Due to reduced international orders, the packaging and testing industry only grew by 18.9% year-on-year, while sales revenues reached 13.905 billion RMB, marking a big drop from the high growth of 63.1% in 2006Q1 and the 30.7% growth in 2006Q4. Relative to the notable slowdown in the growth of the packaging and testing industry, the IC design and chip making industries continued to maintain stable growth. In 2007Q1, sales revenues reached 5.349 billion RMB in the IC design industry and 7.867 billion RMB in the chip manufacturing industry, up by 45.9% and 32.8% year-on-year respectively. Compared with 2006Q4, the IC design industry saw a drop of 2.9% in growth rate, while the chip manufacturing industry fell by 3.3%.

As for regional development, the IC sales revenues in the Yangtze River Delta region reached 19,977 billion RMB in 2007Q1, up by 28.8% year-on-year. It is the most concentrated and the fastest-growing IC industry region in China. Affected by a slowing packaging and testing industry the IC industry in the Pearl River Delta region saw its growth drop to 25.6% in 2007Q1 from 53.4% in 2006Q4, with a size of 1.645 billion RMB. In Beijing-Tianjin Bohai Rim region, the IC industry also slowed down. Sales revenues stood at 4.727 billion RMB, up by 21.7% year-on-year.

From the aspect of the IC market and industrial environment both at home and abroad, in 2007 China's IC industry will bid farewell to the high growth of 43% in 2006 and once again enter a relatively stable growth cycle. Industry size growth for the whole year is expected to fall under 30%, with an industry size of around 130 billion RMB. Despite of the slow down, China will still have the fastest-growing IC industry in the world in 2007. It will further increase its position in the global IC industry.