Fabless industry in China to quadruple by 2008, says iSuppli

(11/01/2004 4:05 PM EST)

  MANHASSET, N.Y. — Huge potential demand and strong government support will cause China's fabless semiconductor market to see revenue grow at a compound annual rate of 32 percent from $288 million in 2003 to $1.2 billion by 2008, said market research firm iSuppli Corp. (El Segundo, Calif.).

An iSuppli report estimates China has 468 IC design companies, many seeking to survive with funding from government or private investors. The firm believes the industry, though rapidly growing, still has years to go before it becomes a significant size.

Chinese OEMs have until recently refrained from using local fabless companies because of quality and availability concerns. But recent design wins with major Chinese OEMs are changing that mindset, iSuppli said, raising hopes for many fabless suppliers.

Only a dozen fabless Chinese companies can be considered large in terms of sales, the largest one being Beijing Datang Microelectronics, whose 2003 sales were $60 million, said iSuppli.