China's Impact on the Semiconductor Industry: 2012 Update Ch2

China's semiconductor industry - Strong but variable growth

China's semiconductor industry grew by 14.4% in 2011 to reach a record $43.5 billion. Measured in US dollars, China's semiconductor industry growth was more than ten times greater than that of the total worldwide semiconductor industry. A significant portion of that exceptional growth was attributed to China's IC design or fabless sector, which grew by more than 36% in 2011. From the Chinese perspective, five percentage points of that increase was the result of China's continuing revaluation of the RMB. Measured in local (RMB) currency, China's semiconductor industry grew by 9.3% in 2011, less than half of what Chinese officials had forecast, but still several times greater than the total worldwide industry.

China's exceptional relative semiconductor performance in 2011 was also evident in the continued growth of China's IC consumption/production gap.  The gap is the difference between IC consumption and IC industry revenues.  Both China's IC market consumption and China's IC industry production increased to new record levels in 2011.  As a result, China's IC consumption/production gap also increased to a new record level in 2011.  In marked contrast, China's discrete (including LED) production versus consumption surplus also increased on a new record level in 2011.

Where is all this growth located? The East China region has grown to have the heaviest concentration of China's semiconductor industry, accounting for 56% of China's IC industry revenues in 2011.  An additional 23% of China's IC industry revenues come from the North China region.

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