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Round-up Report
May 2004
China IT market to post 15.6% growth in next two years(May 24, 2004)
The IT market in China will achieve a 15.6% composite growth over the next two years, International Data Corp. (IDC) said in a statement released recently. The report indicated that China’s IT market performed well in 2003. The hardware market stopped sliding to post an 8.0% increase, while software and services shot up by 24.0% and 20.6% respectively. Laptops and small servers posted the fastest growth of all IT products in 2003, while wireless network communications and network security systems reported remarkable growth.
IDC also predicted there will be strong growth opportunities created by combining traditional industries with the IT industry, including automotive electronics, medical electronics, entertainment electronics and digital TV. The Chinese government is also expected to replace the financial trade to become the largest buyer of IT products in China.
Eastcom, Samsung cooperate to promote 3G development in China(May 24, 2004)
Hangzhou-based Eastern Communications Co. Ltd. (Shanghai Stock: 600677) in east China's Zhejiang Province recently signed a joint venture agreement with the Korean conglomerate Samsung Electronics. The new company, Hangzhou Samsung Eastcom Technologies will deploy 3G mobile communications devices in China.
The two companies will invest US$15 million in the venture, with Samsung Electronics taking a 70% stake. "This joint venture is a major step in our deployment in preparation for the launch of 3G in China," said Samsung Electronics China spokesman Li Wei. Samsung has already developed 3G technologies based on the code division multiple access (CDMA) 2000 standard.
The joint venture with Eastcom will enable Samsung to gain a foothold in the European-initiated wideband CDMA (WCDMA) standard. It will be engaged in the research and development of WCDMA technologies and the localization of Samsung Electronics' technologies developed in the Republic of Korea.
An Eastcom spokesman said the joint venture may also produce WCDMA equipment at a later date. Li said Samsung Electronics does not consider itself to be lagging behind its European competitors such as Ericsson, Nokia and Siemens regarding WCDMA in China.
He said Samsung Electronics will support all three 3G standards in China, the other one being the Chinese-initiated time division synchronous CDMA (TD-SCDMA).
Yageo Suzhou lifts output capacity(May 24, 2004)
Yageo Suzhou Electronics Co., Ltd. now boasts a monthly output of 12 billion R-chips (chip resistor) and 1 billion MLCC (multiple layer ceramic capacitors), announced Taiwan-based Yageo Corporation recently. With the second MLCC line put into trial operation in late April, Yageo Suzhou is expected to produce 2 billion MLCCs per month later in the year.
By then, the company should have gained 20% of the mainland MLCC market, up from last year’s 15%, according to Yageo. It is also predicting that its share of the Chinese R-chip market will rise to 40% this year. “The mainland (passive component) market will maintain 20%-25% growth rate in the next three years, contributed mainly by notebook computers, mobile phone, computer motherboards and consumer electronics,” said Li Weizheng, general manager of Yageo Electronics (China) Corporation.
Yageo Corporation is one of the three manufacturers in the world to produce all three kinds of passive components: resistors, capacitors and inductors.
China’s WLAN equipment market slumps to US$13.5 Mn(May 17, 2004)
China’s WLAN equipment market demand dropped 28.7% to US$13.5 million in the first quarter, compared with Q4 in 2003, based on a CCID report.
Vincent Huang, general manager of Chuanghwa Information Communication Technology explained that this fall was partly caused by the proposed China WLAN standard, WAPI, since December of last year. Recently, China has agreed to revise its WLAN standard and cooperate with IEEE more closely. This should boost China’s WLAN market in the latter part of the year.
The Top five vendors in China’s WLAN equipment market are: Cisco (23%), D-Link (17%), Netgear (16%), Huawei Technologies (14%) and TP-Link (8%). Huawei Technologies is the only Chinese company listed as one of the top five vendors.
US imposes 78.45% anti-dumping duty on Chinese TVs(May 17, 2004)
The US International Trade Commission will impose anti-dumping duties on 10 Chinese TV manufacturers by early June this year. The highest rate can be as much as 78.45%. The effected TV manufacturers include Sichuan Changhong, TCL group, Haier Group, Hisense, and Skyworth among others.
Based on a Reuters report, $300 million worth of televisions from China will be hit with an anti-dumping duty. This amounts to about 2 million units of 14’’ to 25’’ TV sets. Larger screen and panel display TVs will not be affected by the anti-dumping sanction. China made 61 million TV sets last year with 40% of them exported abroad. The US anti-dumping duty will affect about 10% of China’s TV exports.
Handset buyer fair to open on May 15 in Tianjin(May 17, 2004)
The second international handset manufacturing & buyer fair took place on May 15 in Tianjin. This is an important gathering of handset makers, handset component suppliers and distributors. Over 30 handset makers attended this fair, including Motorola, Nokia, Samsung, Siemens, TCL and Bird. They shared their new product roadmaps and market forecasts with their suppliers.
More than 300 handset components and parts suppliers participated in this meeting. A key discussion point was that they are challenged by the short supply of key components and parts such as LCD displays, CCD and CMOS image sensors, media processors for smart phones and memory chips.
With the supply challenges, buyers and suppliers sat around the table to discuss how to improve visibility in the supply chain, forecast techniques and building strategic partnership between buyers and suppliers.
China plays a larger role at EDS 2004 in Las Vegas(May 10, 2004)
China was seen to take an ever-increasing role at EDS, the annual Electronic Distribution Show & conference, from May 3-6, 2004, at the Paris Hotel in Las Vegas. More than 300 exhibitors and thousands of attendees discussed the challenges they face as China plays an increasing role in the global supply chain.
Michael Liu, Chief analyst at China Outlook Consulting, gave a presentation about the current electronics market in China, production capacity in China and the distribution network in China.
According to Liu, the average revenues for Chinese distributors was about US$20 million in 2003 and is expected to grow 25% in 2004. A key discussion point at this presentation and others was how US distributors could turn their design wins in N. America into volume sales when EMS services were outsourced to China and other Asian countries.
EDS, sponsored by NEDA (National Electronic Distribution Association, ERA (Electronic Representative Association) and the ECA (Electronic Component Association), is the world’s largest gathering of franchised distributors, electronic component manufacturers and manufacturers’ representatives.
Notebook shipments in China up 43.7% in Q104(May 10, 2004)
Notebook shipments in China increased 43.7% to 377,900 units in the 1st quarter, according to CCID and a DigiTimes report. Interestingly, the top 4 Global vendors IBM, Dell, Toshiba and Hewlett Packard nabbed a greater than 50% market share with 51.3% while China’s top 4, Lenovo (formerly Legend), Beijing Founder, Tsinghua Tongfang and Tsinghua Unisplendour fell below a 30% domestic share (28.7%) for the first time.
The top ten notebook vendors in China are as follows: Lenovo (15.1%), IBM(14.9%), Dell(14.2%), Toshiba(11.6%), HP(10.6%), Acer(5.9%), Samsung(5.8%), Beijing Founder(5%), Asustek (4.7%) and Tsinghua Tongfang (4.3%).
Siemens teams with Bird in handset market(May 10, 2004)
Siemens mobile, the mobile communication group of Siemens AG, and Bird, China’s leading handset maker, recently signed a MoU (Memorandum of Understanding) to form a long-term strategic partnership.
Based on the MoU, the two big players will jointly develop mobile handsets and sell them under the Bird brand. Bird will use the Siemens platform to develop handsets. Additionally, Bird will sell Siemens’ handsets in its over 30,000 nationwide retail shops.
The tie-up is described as a win-win strategy for both parties as Bird will be able to improve its international reputation while Siemens will gain deeper penetration into China’s handset market.
Alcatel to form JV with China’s TCL(May 3, 2004)
French telecom equipment provider, Alcatel SA, recently signed a memorandum of understanding with TCL, China’s second largest Mobile handset manufacturer to set up a joint venture for R&D, sales and distribution of mobile handsets and related products and services.
The JV will benefit both parties according to Dr. Wan Mingjian, the CEO of TCL Mobile, as he stated, “This is an exciting partnership which will provide TCL Mobile with a platform to rapidly grow our international business. We believe this will help us to quickly achieve our objective to become one of the leading global mobile handset manufacturers. Furthermore, the joint venture and TCL Mobile will be able to create significant synergies to deliver a profitable business going forward.”
The new company will have net assets of 100 million EURO. TCL will own 55% while Alcatel will own the remaining 45% of the company . The new venture expects to be fully operational by the third quarter of 2004.
Siemens installs WAP gateway for China Mobile(May 3, 2004)
Siemens Information and Communication Mobile (Siemens Mobile), the leading telecom equipment supplier, recently got a contract from China Mobile Communication Corporation (China Mobile), China’s largest mobile telecom operator to help China Mobile with the installation of a WAP gateway. Based on the contract, Siemens will set up the world’s second-largest WAP installation in Guangdong, Shangdong, Shanghai, Zhejiang and Sichuan province. More than 100 million mobile phone users will be able to access the internet through Mobile Smart Proxy.
Mobile Smart Proxy 3.0 will also allow China Mobile’s subscribers to download images, ring tones and Java applications from the internet. The Siemens WAP gateway system enables 2400 transactions per second and China Mobile will be able to bill the data content for prepaid customers flexibly and in real time.
The contract enhances the already strong cooperation between Siemens Mobile and China Mobile.
China’s total phone users reach 571.39 million in Q104(May 3, 2004)
China’s total phone users reached 571.39 million by the end of the 1st quarter of 2004. Based on the MII report, during Jan to March, Mobile phone users reached 290.31 million with an increase of 21.62 million users, while fixed-line phone subscribers increased 17.77 million to reach a total of 281.08 million.
The MII expects to have 52 million new mobile phone users and 40 million new fixed-line users in 2004, amounting to a 48% telephone penetration rate nationwide in China. If the speed of new subscribers continues like the 1st quarter this year, the MII’s target won’t be hard to achieve.
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