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Round-up Report
ARCHIVES OF CHINA MARKET FLASH
OCTOBER 2003
Sina’s revenue rises 208% in the third quarter (Oct 31, 2003)
China online media giant Sina announced its third quarter net revenue rose 208% to US$3.84million, compared with the same period last year. Its advertising revenue totaled US$1.37 million, up 76% while non-advertising revenue was US$2.47million, up 431%, driven by growth in cellular value added services.
Sina recently launched ring back tone services in addition to its ongoing SMS and WAP services. Significant resources bundled with SMS ring-back activities have been invested in reporting news and events. Two successful projects are news reporting and prize-based contests for the Women’s Soccer World Cup and Miss World. When people ring back and send messages to Sina, Sina and China Mobile share the SMS revenue.
Being a leading online media provider for China’s recent historic manned-space flight, Sina provided in-depth and round-the-clock coverage that attracted 150 million visitors to the news Channel. Experts estimate that Sina will keep growing in the fourth quarter and achieve US$4.3 million in revenue with US$2.8 million in non-advertising income.
Virus-killers needed in China (Oct 31, 2003)
A survey from China’s Ministry of Public Security showed that about 85% of computers were attacked by viruses in May and June this year. The survey also stated that file downloads, booby-trapped websites and e-mail attachments were the most common ways of getting infected. In addition, lack of security software and awareness of infections caused the higher infection rate.
With 70 million computers in the nation,there exist great opportunities for virus protection software vendors. However, all virus protection software and security software have to get approval from the Public Security Bureau before they can enter into China’s market.
Second China step for Universal Instruments (Oct 31, 2003)
To share technical solutions, Universal Instruments (Suzhou) R&D center set up open days on Nov.6-7, that enabled participants to understand how to achieve maximum efficiency and productivity. Meanwhile, participants will be invited to watch the entire PCB assembly process.
Universal Instruments’ (Suzhou) R&D center is seen as the second step of the company’s development strategy in China after establishing manufacturing in Shenzhen. With the Shenzhen manufacturing facility, the company has gained low cost and instant supply chain support. Now, the Suzhou R&D center is the second step of its China strategy to achieve optimized cooperation with its clients in R&D solutions in a realistic industrial environment. During these two open days, its technical partners such as DEK, Vitronics Soltec, Sage, Asymtek and Daimler Chrysler will chair various seminars on how to provide customized solutions to clients.
As an industry-leading support and service provider, Universal Instruments is considered to have the most comprehensive service infrastructure in the industry. Its business in China includes manufacturing, sales, customer service, product training and component distribution.
China's auto production over 4 million in 2003 (Oct 20, 2003)
Xinhua Oct. 13 - China produced 2.728 million motor vehicles in the first eight months this year, up 36 percent over the same period of last year.
China registered sales of 2.723 million motor vehicles in the eight-month period, 30.7 percent higher than the figure for last year's corresponding period. Sales of sedan cars accounted for 42.5 percent of total auto sales in the first eight months.
Based on last year's 3.25 million units of production, experts project China's 2003 motor vehicle output will break the 4 million unit milestone. The high growth and the business size will no doubt push the development of the auto electronics industry, including car A/V and entertainment devices and electronics controls for windows, seats, mirrors, and car communications.
CDMA targets corporate users through agents in China (Oct 20, 2003)
Shenzhen-listed Changfeng Communication Co. Ltd. has signed 20,000 new CDMA subscribers from Beijing's Administration for Industry and Commerce (BAIC), according to a September press conference in Chongqing's company headquarters.
The 20,000 new subscribers represent staff members of BAIC, plus their family members. The bulk sale will provide discounts on day-to-day operation fees and speed-dialing functions similar to using a PBX (Private Business Exchange) environment where you virtually do not pay for local calls. To enter the end-user market, Changfeng Communication has built a strategic alliance with China Construction Bank and China Minshen Banking Corporation. The company has utilized China Construction Bank's (Beijing Branch) 60 branch offices in the Beijing metropolitan area to push its bundled CDMA sales. A free CDMA handset and account is given, with a 2-year service contract and a deposit guaranteed through a bank account at one of the bank's branches.
China Unicom has achieved 5.8 million new subscribers as of the end of August. To attain their goal of 13 million new CDMA new subscribers by the end of 2003, the remaining months of this year will be very challenging. Obviously, Unicom's first strategy is to gain market-share and to work with agents to help penetrate the market for corporate users and bulk sales. Changfeng Communications is one of the key agents helping Unicom with its aggressive CDMA targets.
Fairchild starts new assembly and test factory in China (Oct 20, 2003)
Leading IC maker Fairchild Semiconductor opened its first assembly and test plant in China earlier this month. 579 employees now work in the brand new 400,000 square ft. facility in Suzhou. The new facility will enable the company's sales in China to double in 2004. The company also revealed a second phase extension that will bring the total operating area to 800,000 square feet and employ nearly 2,000 people by 2005. Fairchild is expecting to reduce assembly and test costs by 30% with the new facilities compared to purchasing outsourced assembly/test services.
The plant will focus on power, analog, and logic products for the Chinese market, as well as Asia and international markets. Fairchild is keen at building business ties with Chinese electronics leaders, including Bird, Changhong, Konka, Haier, Huawei, Shinco, Skyworth, TCL and others.
In 2002, Fairchild's China sales revenues hit US$270 million and it expects its sales revenue to grow by 26% and reach US$340 million this year.
China targets ASEAN to balance export destinations (Oct 13, 2003)
With the pressure to appreciate the RMB, Chinese Premier Wen Jia Bao is seeking a solution in ASEAN countries. Wen and leaders of the ten-member ASEAN trade group signed a joint declaration to establish a strategic partnership for peace and prosperity in a bid to further strengthen cooperation in the 21st century. Based on the declaration, China will target US$100 Billion in bilateral trade with the ten ASEAN countries by 2005 - surpassing bilateral trade with Japan. Today, China's top trading partners are the U.S., Europe, Japan and ASEAN according to China customs statistics. Obviously, this sequence is set to change in the next two years.
Besides finished goods exports, the Chinese government will encourage its enterprises to invest in ASEAN as part of a commitment from China. Chinese companies will bring technology, employment opportunities and business models to these ASEAN countries and drive development of the local economies. Electronics manufacturers will play an important role because China's electronics exports are over 30% of the nation's total. To transfer production facilities to ASEAN, China's electronics manufacturing can better apply their technology to extend product life times, as well as release oversupply capacities in consumer electronics in particular. Potentially, China will buy more components and ICs from their China-based R&D centers to keep off-shore production going.
China emerges from SARS shadow with consumer confidence rise (Oct 13, 2003)
China's consumer confidence index reached 93.1 points in September, rising for the third consecutive month, according to a report from the National Bureau of Statistics (NBS) released on Oct 8, 2003. The index measures consumer spending and confidence in the future economy. Without a doubt, Chinese consumers have walked out of the shadow of SARS and have an optimistic view about the continuous growth of China's economy.
Statistics show a surge in September tourism as well as purchasing durable goods such as cars and homes. The October week-long national holiday is expected to be a big driver in the October index.
8-inch fabs to replace 6-inch production (Oct 6, 2003)
Digitimes, Oct. 3 - Due to strong consumer electronics chip demand for Chinese New Year sales, Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) plan to use 8-inch fab capacity to relieve tight capacity at 6-inch fabs.
The foundry giants project that orders for DVD player controllers and 4- and 8-bit MCUs using 0.35- to 0.8-micron processing will grow by over 25-30% in the fourth quarter.
Since Chinese New Year is in January/February, varying with the Chinese Lunar calendar, Q4 is usually the busiest purchasing and production season. But, the demand for ICs/components fluctuates because of low visibility in end markets. For instance, the over-supply of consumer electronics products in China might lead to price-wars that result in the cancellation of purchase orders.
China's telecom business hits US$36.3 Bn in first 8 months (Oct 6, 2003)
China's overall telecommunications business reached sales revenues of US$36.3 billion in the first 8 months this year according to the Ministry of Information Industry (MII). The data showed 14.1% growth compared with the same period last year. The MII also announced that new fixed line subscribers reached 30.70 million and new mobile phone subscribers reached 38.11 million reflecting continued growth in the sector.
