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Round-up Report
September 2004
Ningbo launches China’s first hi-definition video chip (Sept 19, 2004)
Ningbo Zhongke IC Design Center (Ningbo, Jiangsu) announced its first high definition video chip: Phoenix Chip No. 1. This chip can be used in the HDTV products, DVD products, digital camera, video conferencing and video monitoring system. It has been regarded as a big progress in China’s IC design industry.
Ningbo Zhongke IC Design Center is jointly invested by the Institute of Computing Technology of Chinese Academy of Sciences and Ningbo municipality government. This IC design center has five independent EDA work stations and over 40 engineers. The center mainly serves EMS and ODM in Ningbo and Jiangsu province.
TCL builds a new air-conditioner manufacturing center(Sept 19, 2004)
TCL Corp (Huizhou, Guangdong), China’s leading consumer electronics manufacturer, planned to expand its air-conditioner manufacturing facility in Wuhan, Hubei Province. This center is expected to have 3 million unit annual production capacity.
TCL Corp. is a well known tire-one brand in TV products, DVD players and handsets, but yet to be recognized in air-conditioners and other white-goods products. Currently, the company manufactures air-conditioners in Zhongshan, Guangdong province. When the new Wuhan factory is in operation, the two production facilities, as a whole, are expected to make 5 million air-conditioner units per year.
TCL aims at becoming a top-three brand in the domestic air-conditioner market, with annual sales of 8 million units in 3-5 years. Today, the top three brands in China’s air-conditioner market are: Gree, Kelong and Haier.
Philips Targets US$ 14 bn Sales in China by 2007 (Sept 19, 2004)
Philips Electronics announced a new brand promise evolving around the concept of “Sense and Simplicity” in China. The company plans to achieve one third of its total revenue in China by 2007, or the company’s China revenue will be US$14.4 bn at that time.
The company will spend US$96 million on a new advertising campaign to spread its message to customers around the world, including China, the US, the Netherlands, Germany, France and etc, stated Yue Zhang, CEO of Philips Electronics China Group in a press conference.
Philips has invested US$3.4bn in its China business since 1986. It has 15 fully owned operations and 20 JVs with sales revenue of US$7.5bn in 2003.
Motorola plans R&D center in China (Sept 12, 2004)
Motorola Inc.(Nasdaq:MOT) announced that it plans to invest US$90 million to set up a R&D center in Beijing, China, with focus on handset design and user interfaces. This center will be the biggest and most comprehensive one among all multinational corporations, declared by Danie Shi, president of Motorola China.
At the June end, Motorola toped as the second-largest cellphone maker in China, with 14.1% market share, only 1.4% less than the No. 1 maker Nokia, bypassing China’s Bird.
In 2004, China’s handset market is about 70 million units which is worth about US$80 bn. Motorola expects to achieve 15% of its entire revenue from Chinese market through enhancing its R&D strength in China.
China’s industrial production grows 15.9% in Aug.(Sept 12, 2004)
China’s industrial production growth continues in August. Based on the data from the National Statistics Bureau, China’s production output grew 15.9% YOY to US$55 bn, up 0.4% over July. The continuous growth of China’s industry production will possibly drive the central bank to raise its interest rate for the first time since 1995.
Electronics industrial sector has played a major role. In Aug., products of IC, discreet semiconductor, PC, printer, display panel have a YOY growth range of 32.3-63%. The entire export has a YOY growth of 32.1%.
Xiao Chuan Zhou, governor of central bank of China, indicated that policy on bank loan costs may be released after reviewing the economic reports of August. Shanghai Bao shang Steel Group predicts the interest rate will be raised for the government is trying to cool down the over hot China economy, some sources said.
Dell opens service center in Southeast of China (Sept 12, 2004)
Dell Inc.(Nasdaq: DELL), a premier provider of products and services required for customers to build their information technology and internet infrastructures, recently opened its first Enterprise Command Center(ECC) in Xiamen, southeast of China. This center aims at providing high-level, around-the-clock-support for server and storage customers by monitoring weather and traffic patterns and other planned or unplanned events.
"The opening of the new ECC in China enhances Dell's ability to deliver quality service to our enterprise customers in markets we serve," said Gary Cotshott, Vice President and general manager of Dell's services business. "Our customers have benefited from Dell's ability to use tracking and mapping tools enabling us to work around obstacles that might otherwise cause service delays."
The strategy of ECC is also receiving high marks from industry analysts. John McArthur, Group Vice President and General Manager of Information Infrastructure, at IDC thinks that "The command center model which Dell has developed is a key element in delivering critical IT infrastructure services to businesses whose own success is dependent on having their IT infrastructure up and running at critical times."
Later this year, Dell plans to open an ECC in Japan. Early next year, another ECC is expected to come online in the Asia-Pacific region.
NEPCON South China & EMT South China held in Shenzhen (Sept 5, 2004)
The 10th NEPCON South China, in conjunction with Electronics Manufacturing Technology (EMT) South China, was held from Aug.30 to Sept.2 in Shenzhen, Guangdong province. This is one of the most established electronics events that attracted production and manufacturing professionals in the Pearl River Delta.
This event provided timely production solutions to equipment and MRO buyers, as well as great opportunities for vendors and distributors to collect market responses. It’s a great gathering for buyers, suppliers and distributors to interact directly. Exhibitors include not only big global companies such as 3M, American Tec, Universal Technologies, Hitachi Hi-Tech and Samsung, but also regional players such as WKK, Sun East Technology and General Electric Group. Chinese local test and production equipment vendors are active at approaching no lead equipment and introducing machine vision functions at SMT equipment.
Over 350 exhibitors participated in this event. At the “High-level SMT Technical Conference”, speakers from BTU, ERSA,KIC, Kester, Orbotech, Omron, Samsung, TECHWIN, Tyco, Schmidt, Universal, Shenzhen Power Stencil provided the latest information and technologies on today’s electronics market.
SMIC runs the first 12-inch fab in China(Sept 5, 2004)
Semiconductor Manufacturing International Corporation (SMIC), China’s leading IC foundry, recently completed a 12-inch fab in Beijing and started operation. This is the first 12-inch fab in China. With US$1.2 billion investment, the fab targeted 21,000 pieces as its monthly production capacity.
Based on Ruing Zhang, CEO of SMIC, the company planed to build 3 12-inch fabs in the near future. Till the end of this year, the company aimed at making 125,000 pieces per month in its Shanghai, Beijing and Tianjin facilities. SMIC also want to achieve 15% global market share in 2005.
Early in March this year, SMIC was listed on New York Exchange (NYSE) and the Hong Kong Stock Exchange (HKSE), raising nearly US$1.8 bn to invest in its expansion of its production capacity.
China Telecom posts its interim results (Sept 5, 2004)
China Telecom, the largest fixed-line service provided, accounted its interim results as of June 30, 2004. The company’s sales revenue in the first 6 month was US$9.2bn, up 9.8% YOY. Revenue from local calls was US$4.9 bn, accounting for 53.3% of the total revenue; revenue generated from long distance reached US$1.9bn, contributing 19.8% and revenue from internet service was US$798 million, accounting for 8.7%. The revenue YOY growth of the local calls, long distance and internet service were 7.7%, 2.8% and 51.6% respectively.
At the June end, China Telecom had 178.5 million fixed-line subscribers, up 10.9% YOY, In the total subscribers, the company had 36.47 million Little Smart users, up 115%; and 10.9 million broadband subscribers, up 50.6% YoY.
Driven by the boosting broadband business and the previous acquisition, the company’s net profit achieved US$1.26bn in the first six months, up 28.1% YOY. ARPU for broadband service and Little Smart were US$13 and US$5.4 respectively.
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