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Round-up Report
August 2004
Spreadtrum develops the first dual mode TD-SCDMA/GSM chipset (Aug 29, 2004)
Speadtrum Communications (Beijing, China) recently developed the first homemade dual mode TD-SCDMA/GSM chipset for 3G mobile phones. The company plans to start manufacturing by the end of this year and expect large production in 2005. This newly born chipset has been regarded as a big breakthrough in 3G chip development.
The company has already signed agreement with Amoi, Lenovo, Hisense and Bird in terms of providing the chipset to these top Chinese handset OEMs.
We expect to have 5-6 kind of handset using China-made chipset by May 2005, said Qi Zhang, director of product managing department of the MII. At present, another two companies Commit and Kaiming, both located in Beijing, have been developing the same kind of chipset.
China’s telecom business continues to grow (Aug 29, 2004)
According to Ministry of Information Industry (MII), by the end of July, China’s mobile phone users reached 310 million, added 5 million in July; fixed line subscribers increased 4 million in July to 299 million. Driven by the fast growth of China’s economy, China's total communications service revenue hit US$40bn at July end, up 30% over last month.
China’s 3G operating license has been expected to be released in the mid of 2005, which will boost the growth of China’s telecom business. The MII predicted that 3G will generate US$72.5bn investment opportunities. China Mobile and China Unicom have been actively update their mobile-service infrastructure.
China Unicom announces its interim results (Aug 29, 2004)
China Unicom(HKSE:0762; NYSE:CHU), the second largest mobile phone service provider, recently announced its interim results as of June 30, 2004. The company’s sales revenue in the first 6 months was US$4.76bn, up 23.2% YOY. Among the total revenue, revenue from GSM service was US$ 2.9bn, up 17% YOY and revenue from CDMA service was US$1.54bn, up 62.5% YOY.
In the first half of 2004, the company’s mobile service subscribers bypassed 100 million to 102.513 million, representing 34% of the market share. Among the company’s cellular subscribers, 78.78 million are GSM subscribers while 23.73 million are CDMA users. The average revenue per unit (ARPU) per month of GSM and CDMA are US$6.27 and US$11 respectively.
With respect to its business development in the second half of 2004, Mr. Jianzhou Wang, Chairman, CEO and President of China Unicom said, "The Company will focus on the development of CDMA1X value-added services and endeavor to nurture mobile data services market, so as to drive CDMA business growth.”
Digital camera shipments triple in China in 2Q(Aug 22, 2004)
Digital camera sales in China domestic market has reached 606,000 units in Q2, up 280% YOY; sales revenue grew 213.2% YOY to US$152 million, based on CCID data Mid-high end digital cameras (3-4 megapixels) accounted for 43.32% of the entire sales volume.
International brands like Canon, Sony and Kodak has a combined market share of 72.53% in Q2.
International Data Corp.(IDC) expects digital camera shipments in China will rise 65% to 2.32 million units in 2004 and climb steadily to 6.5 million in 2008. Analysts are optimistic about the revenue growth because of the Beijing Olympic Games in 2008 and Shanghai World Expo in 2010 which are likely to boost digital camera sales.However, price has to be reduced to spur the sales.
Hynix to set up a 12-inch plant in Wuxi(Aug 22, 2004)
Hynix Semiconductor Inc. announced to set up a 12-inch plant with STMicroelectronics in Wuxi, China. The total investment will be US$2 billion. Hynix expects to have 67% ownership of the plant while STMicroelectronics will take the rest of 33%. Hynix has recently signed a contract with Wuxi municipal government.
This plant is expected to use China’s cheap resources to expand Hynix’s manufacturing facilities for a 12-inch wafer fab through the alliance with STMicroelectronics. This has been regarded as an important step for Hynix to improve its competitiveness and keep its global leading position as a chip maker.
Hynix plans to complete construction of this chip plant by the second half of 2005 and expects to start mass production in 2006.
China’s top 100 electronics companies grows in the first half(Aug 22, 2004)
During the first half of 2004, China’s top 100 electronics companies achieved sales revenue of US$44.5 bn, up 29% YOY; profits reached 1.5 bn, up26%; exports reached US$10.8bn, up 42%, based on the data from the Ministry of Information Industry (MII).
China’s telecom business hits US$30.66bn in the first 6 months(Aug 22, 2004)
China’s overall telecommunication business reached sales revenue of US$30.67bn in the first 6 month this year according to the Ministry of Information Industry(MII). The data showed 13% YOY growth. The MII also announced that new fixed line subscribers reached 295 million and new mobile phone subscribers reached 305 million; broadband users rose 59% to 17.73 million. All above reflected continued growth in this sector.
China has over 87 million internet users(Aug 15, 2004)
China has over 87 million Internet users by the end of June 30, 2004, up 27.9% YOY, based on a report of China Internet Network Information Center (CNNIC).
Among these Internet users, 17.7% used ADSL/Cable to access internet, up 77.6% over 2003 end. Broadband connection will soon become major means to access Internet, said Hequan Wu, an academician from the China’s Academy of Engineering.
By the end of June, China has 627,000 websites, a rise of 32.3% YOY. Registered domain names under CN has reached 382,000. The MII (Ministry of Information Industry) has predicted that the number of Internet users in China will reach 300 million by the end of 2007.
China develops the world’s 1st Internet IPv6 wireless router(Aug 15, 2004)
Beijing Jiaotong University recently developed the world’s 1st Internet IPv6 wireless router.
This router, named the BJTU-IPV6 wireless/mobile router, is based on 128-bit Internet address space, which will help to create almost unlimited usable IP address space resources to meet increased demand.
"The router is a next generation network node device and was developed by Professor Zhang Hongke and IP Network Laboratory," a resource person at the university explained. "We launched the project to develop this router in 2001, with part of our funding coming from China's 863 Hi-Tech Research and Development Program." The 863 Program is a national hi-tech initiative that provides funding for research projects.
The BJTU-IPv6 just recently passed authentication testing organized by China's Ministry of Education on August 8. It is compliant with both IPv6 and IPv4 networking protocols.
China handset shipments to 61 million in Q2(Aug 15, 2004)
China handset shipments declined from 65.2 million units in the 1st quarter to about 61 million units in the 2nd quarter of 2004, based on the Taiwan-based Market Intelligence Center (MIC).
The MIC predicated that China handset shipments in the third quarter may grow 24.3% to 65.63 million units, driven by back-to-school demand in Sept.
In general, China handset shipments have grown more than expected because of the fast growth of handset exports. During the first half of this year, China handset exports have been doubled. China local handset makers such as Bird and TCL all achieved 2003’s export targets in the first 6 months, based on the companies reports.
ZTE expands its network products lines(Aug 8, 2004)
Shenzhen based ZTE Corp. announced to expand products lines at networking equipment, including terminal products and corporate infrastructure equipments. The company shall make use of its established R&D capacity to the new product equipment. It has developed five strategies in the areas of R&D, product, customized service, sales channels and service.
Being the second largest telecom equipment manufacturer in China, ZTE has established its brand awareness among telecom operators at wireless and wireline infrastructure equipments and handset products in china and Asian countries.
With the new capacity, ZTE shall compete head-to-head to Huawei Technology, No. 1 telecom and networking equipment maker in China. Industry experts believe that China networking terminal devices market has been driven by the emerging SOHO applications dramatically. The products shall be mainly sold through distribution channels, rather than direct sales to customers. This will be a big challenge to ZTE at marketing and sales.
TTE starts operation in Shenzhen(Aug 8, 2004)
TTE, JV of TCL international Holdings and Thomson, started operation in Shenzhen, Guangdong province, on July 29,2004. The newly started company has been regarded as the largest TV maker in the world. It will produce TV units under the brand names of TCL, Thomson and RCA in shenzhen.
Based on the JV agreement between TCL and Thomson signed early this year, TCL and Thomson own 67% and 33% respectively of the newly established JV. The entire company asset is 430 million euros.
TTE will have more than 20,000 sales outlets around the world and target selling 20 million units of Color TV, introduced by the company CEO Zhongyao Zhao.
China achieves big growth in high-end TV exports(Aug 8, 2004)
The Ministry of Commerce statistics announced recently that during the first 6 months of 2004, China has exported 30,000 PDP color TV units, up 115% YOY; China has exported 1.08 million LCD color TV, up 452% YOY.
During the first half of the year, China's total exports of color TV reached 18.92 units, or US$2.11 bn, up 56.7 percent and 79 percent respectively.
In 2003, China exported 32.68 million color TV sets, in a total value of 3.26 billion US dollars. Most of these TVs were exported to North America, Europe and Asia.
China reaches 600 million telephone subscribers (Aug 1, 2004)
According to the Ministry of Information Industry (MII), China has managed 33 million new fixed-line subscribers and 35 million mobile phone subscribers in the first half of 2004. There are 285 million fixed-line and 305 million mobile phone subscribers in total by June 30. Consequently, the telephone penetration rate of combined fixed-line and mobile phone has been lifted up to 46%.
The top five operators (China Telecom, Netcom, Mobile, Unicom and Railcom) has achieved US$31bn revenue. Short massaging has still been one of major revenue stream with US$2 bn revenue or 100 pieces of SMs. Broadband users has reached 17 million with 6.6 million new users increased, which will become a major revenue driver in the near future. As for the infrastructure equipment investment of the top five, it mainly went to edge network expansion and access network of data communication. The total investment of the top five reached US$10.7 bn in the same period.
Beijing Olympic Games brings $16.3 bn investment (Aug 1, 2004)
China will host 2008 Olympic Games in Beijing, becoming the third Asian Olympic nation after Japan and Korea. Beijing Olympic Committee disclosed that US$16.3 bn investment will be planned and budgeted at infrastructure and IT equipment between 2004 and 2006. There will be 117 electronics related projects at mobile communications, penal displays, computers, digital TV broadcasting, network switch and transmission equipment, audio and video equipment, as well as automobile electronics.
The committee would distinguish the Beijing Olympic Games with communications terminals, internet access, digital TV broadcasting. As disclosed, nine optical fiber cables will be connected to provide broadband Internet access for all sport center facilities. The estimated bandwidth is over doubled of that of Sydney Olympics Games in 2000. The committee did not provide a specific figure of electronics spending, but estimation is around 15% of the total investment.
Intel strikes China market (Aug 1, 2004)
Intel is pushing its digital home solutions to major Chinese PC makers in July, aiming at launching new product around 2004 end. Experts believe that Intel has to regain its market share taken by AMD. During last 12 months. AMD has aggressively built strategic alliance with top Chinese PC makers such as Legend, Founder, Amoi and Langchao. However, these companies are likely to embrace Intel again due to more favorite technical and advertising supports.
Founder Group (Beijing, China) singed a MOU to stipulate Intel to provide technical supports and training to Founder. However, Founder has had strategic relationship with AMD since mid 2003 at AMD’s 64 bit CPU. “We have to pay attention to application markets. If a product may not bring real merit to users, we may have to question it,” said Dong Fen Qi, executive president of Founder Group. Amoi (Xiaman, Fujian) used to promote AMD CPU based laptop. However, Xiao Zhong Li confirmed that Amoi will no longer use AMD CUP at its laptop products.
Intel is powerful because it not only provides technical supports and total technical solutions that enable its customers to be profitable, but also provide advertising budget to its strategic customers. Some PC makers may use AMD to bargain with Intel, revealed by an industry analyst. This seems not fair, but ADM did contribute at bringing laptop price down. The mainstream laptop is at $15,000 range in China today.
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