China could make 5% of chips in 2010, says study

China could make 5% of chips in 2010, says study
By Peter Clarke, Semiconductor Business News
November 28, 2002 (7:00 a.m. EST)
URL: http://www.eetimes.com/story/OEG20021127S0039

SCOTTSDALE, Arizona --- Semiconductor market research company IC Insights Inc. has said it believes that China could be responsible for 2% to 3% of worldwide IC production in 2005 and for up up 5% of IC production by 2010.

The company said in its November 2002 'update' that it estimates that China-based IC capacity will be 4.1 million wafers in 2005, based on 200-mm wafer equivalents. Assuming an 85% utilization rate, just over three million wafers would be started in China in 2005 and assuming a revenue per wafer figure of $1200, the total China-based IC production would be $4.1 billion, the update said.

Using IC Insights' 2005 worldwide IC market forecast of $154 billion, China-based IC production would represent 2.7% of the worldwide market, the update observed.

To extrapolate to 2010, IC Insights assumes a 25% compound annual growth rate for 2005-2010 for China-based IC production. This compares with IC Insights' 2005-2010 worldwide IC market CAGR forecast of 10%. On this basis China's 2010 chip production is forecast to be $12.5 billion, a 5% share of worldwide production in 2010.

In addition IC Insights said that it considered TSMC's moves to spend $900 million over the next four years building a wafer fab in China only a “token” effort. The update also pointed out that to achieve $4.1 billion in revenue in 2005 China needs to strike a 50% compound annual growth rate up until then.