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Round-up Report
June 2008
China¡¯s electronics industry grows 19.8% by April end(June 7, 2008)
China¡¯s electronics industry sales revenue reached US$209.3bn in the first months of 2008, growing 19.8% year over year (YOY). Electronics export reached US$159.3bn, up 22% YOY while import grew 15.3% YOY to reach US$116.9 million, according to China government data.
From Jan to April, electronics manufacturing has shown better growth if compared with that in Q1. China made 198 million handsets, growing 7.8% YOY; made 45.22 million PC, growing 34.6% YOY; and made 23.4 million digital camera, growing 35.8% YOY. Digital consumer electronics still showed high growth while traditional electronics products like printer, fax machine showed negative growth.
China¡¯s CPI hits 7.7% in May (June 7, 2008)
China's consumer price index (CPI), the main gauge of inflation, was 7.7% up from the same period last year, according to the National Bureau of Statistics (NBS).
This figure was declining if compared with 8.5% in April and 8.7% in February. Economists expect the trend will sustain in next a few months.
The May CPI rose 7.3 percent in urban areas, and 8.5 percent in rural areas. Meat prices increased 37.8%, with pork surging 48% alone. Cooking oil went up 41.4%, with vegetables increasing 10.3%, aquatic products rising 18.3% and grains up 8.6%.
China has set an annual CPI target of 4.8 percent this year.
China¡¯s PPI rises 8.2 % in May (June 7, 2008)
China's producer price index (PPI) grew by 8.2% in Mayover the same month last year, according to the National Bureau of Statistics (NBS).
The growing prices of raw materials, fuel and power have pushed up costs of farm produce, industrial goods, and eventually lead to higher prices of consumer goods and a rising inflation rate .
Factory-gate prices of crude oil surged 30.9% in May over the same period last year, while gasoline was up 11%, diesel 11.8% and kerosene 11.4%. The producer prices of raw coal jumped 24.1%and those of steel products rose between 26.7% and 43.8%. The purchasing prices, or costs, of fuel and power rose 21%, ferrous metals 22.1%, non-ferrous metals 3.4% and chemical raw materials 6.2%. The PPI for manufactured goods was up 7.4 %in the first five months, while the cost of raw materials, fuel and power rose 10.6%.
China to restructure telecom operators(June 7, 2008)
China recently announced a restructuring plan for the country's fixed-line and mobile operators, a final step towards the long-awaited release of 3G (third-generation) mobile licenses.
The plan will merge or split the operations of Chinese carriers, creating three new operators that will have both mobile and fixed-line services. At present, Chinese fixed-line operators -- which are split along geographical lines -- are not permitted to offer mobile services, while mobile operators may not offer fixed-line services.
Under the restructuring plan, fixed-line carrier China Telecommunications (China Telecom) will acquire the CDMA (Code Division Multiple Access) mobile network from China Unicom. China Telecom will also acquire China Satcom, which offers satellite-based communications services.
China Unicom will retain its GSM (Global System for Mobile Communication) network and merge with fixed-line operator China Network Communications (China Netcom).
China Mobile Communications, China's largest mobile operator, will merge with China Tietong Telecommunication, which operates a national fixed-line network.
China¡¯s electronics industry grows 18.6% during Q12008(May 7, 2008)
China¡¯s electronics industry sales revenue reached US$151.5bn in the first quarter of 2008, growing 18.6% year over year (YOY). Electronics export reached US$115.9bn, up 20.2% YOY while import grew 14.5% YOY to reach US$85.08 million, according to China government data.
Despite the slow down of the entire industry, China Outlook Consulting analysts defined new demands from the emerging markets and explored how the value-add service from telecom operators and service providers will influence market demand for equipments, semiconductors and components. For details, please read the story of ¡°New Telecom Demand in 2008¡± in the May issue of China e-Outlook.
One important issue you need to pay attention at the Q12008 is that Chinese government restructured its government organizations by forming the MIIT(Ministry of Industry and Information Technology to replace the MII(Ministry of Information Industry), effective in April 2008. The mission of MIIT is to promote electronics and information technology among all industry sectors. How this will bring new market demands for semiconductors and components, please read the story of ¡°Ministry restructuring: Next China Electronics Focuses¡± in the April issue of China e-Outlook.
Wirlpool and Hisense set up JV in China(May 7, 2008)
The world leading white goods maker Whirlpool and China¡¯s leading home appliance manufacturer Hisense Group recently announce to set up a joint venture in Huzhou, Zhejiang, China.
The 50-50 joint venture will invest US$129 million to research, develop and manufacture high-end washing machines and refrigerator products for two famous brands: Hisense and Whirlpool, which will supply both international and domestic markets.
The new company is expected to have manufacturing capacity of 2 million washing machines and 1 million refrigerators.
This cooperation will provide Chinese consumers with leading-edge Whirlpool products, and will enhance the globalcompetitiveness for Hisense products in the global marketplace.
Changhong constructs OLED production line Chengdu(May 7, 2008)
Changhong Group recently starts construction of China's first OLED production line with total investment of US$100 million.
The new facility is expected to be completed and put into operation in the first quarter of 2009. Its annual manufacturing capacity will be 12 million OLED screens which will be used to serve Changhong group as well as other customers in China.
OLED is regarded as the third generation display technology after LCD and PDP. Right now, a number of foreign companies including Samsung, LG and Sony as well as more than 30 institutions of higher learning and research institute in China are working on its development. The new facility is expected to make Changhong a major OLED supplier in China.
MOC to release China¡¯s first online trading regulation(Apr 2, 2008)
The Ministry of Commerce(MOC) plans to publish the ¡°Online Commerce Data Protection Regulation¡± in June 2008, which will be China¡¯s first regulation regarding online trading.
The ¡°Online Commerce Data Protection Regulation¡± is aimed to protect enterprises¡¯ network data security against a background of a fast growing outsourcing sector.
According to Linhai Nie, deputy director of MOC¡¯s Informatization Promotion Department, MOC has finished the drafting of the ¡°Online Commerce Data Protection Regulation¡± and is seeking feedbacks from relevant departments. The regulation will work as a guideline for China¡¯s online trading market.
China¡¯s telecom revenue grows 10.1% YOY(Apr 2, 2008)
China¡¯s telecom revenue of US$17.5bn in the first two months of 2008, up 10.1% year on year, according to statistics from the Ministry of Information Industry.
Mobile phone users reached 565.23 million by Feb end of 2008, increasing 17.94 million users while fixed line users reduced 3.26 million to reach 362.18 million.
Broadband users reached 69.79 million with an addition of 3.3 million users. Among this number, xDSL users reached 55.2 million, increasing 3.19 million. Dial-in users continuously showed decrease. By the end of Feb 2008, total dial-in users were 17.52 million, decreased 1.96 million in the first two months of 2008.
China¡¯s air conditioner sales up 26.7% YOY by Feb end(Apr 2, 2008)
China's total air conditioner sales rose 26.7% year-on-year in the first two months of 2008 to reach 11.343 million units, driven by the strong domestic market demand.
In January and February, domestic air conditioner sales soared to 4.07 million units, up 41.4% YOY. Market analysts expect 2008 Olympic Games will boost the domestic air conditioner sales grow 18% this year.
Because of RMB appreciation, local Chinese air-conditioner manufacturers focused more on exploring China¡¯s domestic market. The energy saving requirements from Chinese government will also bring new market opportunities for international semiconductor and component manufacturers in terms of providing low power consumption and high performance products.
China to start analog-digital converter project in Nanchang(Apr 2, 2008)
A large 6-8-inch analog-to-digital converter (ADC) project will be launched in Nanchang, ,Jiangxi Province with a total investment of US$214 million.
This project, jointly invested by Jiangxi War Industry Asset Management Company and Ningbo Huatai Group¡¯s subsidiary Jiangxi Zhonghong Investment Development Co., Ltd, expect to have manufacturing capacity of 320,000 chips annually upon its put into operation.
ADC chip is a high-tech product mainly applied in supporting IC for high-definition TV, power and electronics devices, supporting IC of mobile phones and special use system IC. It has huge market demand and promising market prospect.
Air-conditioner price raises in China(Mar 14, 2008)
China¡¯s air-conditioner products¡¯ price was raised again in Feb 2008 by 5% due to the price increase of copper.
Leading HEA brands in China including Haier, Midea, Panasonic and AUX have raised their air conditioner products prices by 5% to 7% after the Chinese New Year holiday in February, while more have adjusted up the prices of new products and controlled the supply of low-end goods to raise the price in disguise.
Raw material prices increase and the increased demand for air-conditioner products from tier-two and tier-three cities drove the price rose. In 2007, China made 89.98 million units air conductor products, growing 24.2% YOY. Domestic demand accounted for 65% of the total shipment. The growth in shipment also brought more market demand for Power IC, sensor, IGBT,MOSFET and other components.
Lenovo expands in India market(Mar 14, 2008)
Lenovo Group plans to become the largest PC producer in India within the next three years
According to Jun Liu, senior vice president at Lenovo Group, , ¡°Lenovo will reinforce retail network and improve after-sale services in addition to the launch of new products in India, an important market.¡±
Lenovo just launched new brand portable computer IdeaPad and desktop IdeaCenter in India and plans to wage marketing promotions in April. To enhance its sales in India, Lenovo will open more retails stores in India.
China's PPI up 6.6% in February(Mar 14, 2008)
China's producer price index(PPI), a key inflation indicator, rose 6.6% in Feburary year over year, according to the National Bureau of Statistics.
The index, which measures the cost of goods when they leave the factory, was announced amid widespread expectations that China's inflation rate will reach another 11-year high after gaining 7.1% in January.
Crude oil prices soared 37.5% in February over the same month last year. The overall costs of raw materials, fuel and power surged 9.7%.
China¡¯s CPI hits high in Feb(Mar 14, 2008)
China's inflation rate has continued to accelerate, with the consumer price index (CPI) up 8.7% year-on-year in February, the biggest jump in nearly 12 years, according to the National Bureau of Statistics (NBS).
The figure, compared with 7.1% in January, was well above market expectations. For example, the Bank of China, the country's second-largest lender, had predicted a rise of 8.3%.
Food prices surged 23.3% in February, with pork prices up 63.4% and vegetable prices up 46%, contributing more than 80% of the CPI increase.
China¡¯s PPI rose 6.1% in January(Feb 22, 2008)
Surging crude prices pushed up China's producer price index (PPI) by 6.1% in January over the same month last year, the largest monthly rise in three years, According to the National Bureau of Statistics (NBS).
The index, which measures the cost of goods when they leave the factory leaped from 2.4% in August last year to the latest 6.1% in five months, indicating an accelerating price pressure. Crude prices rose by 29.9% over January last year.The costs of raw materials, fuel and power rose by 8.9% in January from a year earlier.
Higher prices at the producer level could lead to rising consumer prices as producers might be pressured to increase prices of consumer products to offset rising costs. Analysts believe government price control will take effect when material supply strain will be eased after the worst snow disaster in decades.
The PPI went up by 5.4 in December and 4.6% in November last year. The increase for 2007 was 3.1%, 0.1 percentage points higher than the 2006 figure.
China under inflation pressures(Feb 22, 2008)
China¡¯s Consumer Price Index (CPI), the main gauge of inflation, hits a new high of 7.1% in January, according to the NBS. The new record of CPI increase would trigger the central bank to further raise interest rate in 2008.
Besides, according to central bank, China¡¯s M2, the broad measure of money supply, grew by a 19-month new high of 18.9% on a yearly basis by the end of January, indicating a relatively relaxed currency supply.
According to the General Administration of Customs, the trade surplus in January jumped 22.6% year-on-year to US$19.49 billion, higher than the growth of 21.7% in Dec. 2007.
Analysts noted that demand from both home and abroad still remains robust and the fixed asset investment would be further heated by huge imports of investment products such as raw materials and equipments. As a result, China¡¯s central bank would further lift up the required reserve ratio in the first quarter and the interest rate would not be adjusted until more economic data come out in March.
ZTE GSM business grows fast in 2007(Feb 22, 2008)
ZTE saw its GSM business expand 10% of its occupation on the global GSM market in 2007 and its sales revenue from GSM equipments market reached US$ 208 million.
ZTE sold GSM equipments amounting to 340,000 carrier frequency last year, up 300% year on year, taking up 10% of the newly added market around the world, a big jump compared with 3% one year ago. The fast overseas growth was regarded as a major propeller pushing ZTE 2007 net profit up between 50% and 70%, according to the company.
The global demand for GSM equipment, especially from such emerging markets as south Asia and African, would keep rising till 2010. Besides, China¡¯s upcoming reshuffle of telecom industry may spur a buying spree of GSM equipments.
Though GSM business is developing fast, CDMA business will be decisive to ZTE¡¯s destiny on 3G market, market analysts noted.
Vimicro launches mobile platform Vinno-III-win(Feb 22, 2008)
Vimicro Corporation, a leading fabless semiconductor company, recently announced the release of its mobile platform Vinno-III-win and processor Vinno-III (VC0818) to lower the cost of smart phone and popularize its use.
The mobile platform is based on Microsoft¡¯s Windows Mobile operating system.
Yundong Zhang, Senior Vice President of Vimicro, said Vinno-III is not only a powerful chip but also a flexible platform, based on which the cell phone producer could provide consumers with differentiated products.
Yuanqing Shen, senior supervisor with Strategic Partnership Group of Microsoft China Research & Development Group, noted that Microsoft is pleased that Vimicro¡¯s mobile platform could develop fast on Windows Mobile and the two sides would deepen cooperation.
Lenovo acquires assets from Sanmina-SCI(Feb 22, 2008)
China¡¯s leading PC producer Lenovo Group confirmed that it has entered into a non-binding agreement with Sanmina-SCI to transit responsibility of personal computing operation in Mexico and to buy certain related assets of Sanmina-SCI.
Under the agreement, Lenovo could take advantage of Sanmina-SCI¡¯s production line in Monterrey, Mexico to expand production capacity outside Asia. Last year Lenovo took great efforts to build plants in Mexico and Poland. This acquisition is meaningful for Lenovo to expand in the overseas market and Lenovo¡¯s rivals including Dell and Acer also outsource partial production to the OEMs in China¡¯s mainland, Taiwan, and other regions.
Besides the deal with Lenovo, Sanmina-SCI also signed an agreement with Foxteq Holdings Inc., a member of Foxconn Technology Group, for the sale of certain assets of its personal computing business and associated logistics services located in Hungary, Mexico and the United States.
Changhong acquires Little Swan(Feb 22, 2008)
Sichuan Changhong Electric Co., Ltd, one of China¡¯s leading household electric apparatus producers, recently announced to give up the bid for buying a 24.01% stake in Little Swan for price overvaluation, leaving Midea Electric Appliances alone in the game.
According to the announcement, Changhong got an approval from Wuxi Guolian Development (Group) Co., Ltd., the controller of Little Swan, to take over 87.67 million shares of the washing machine maker at no less than US$229 million. The money was required to be paid in one-time cash, equivalent to US$2.6 per share.
Little Swan A-shares closed at US$ 3 on Jan. 11 2008, the last trading day before suspension for the buy-out deal.
China to fund rural electronics purchase(Feb 14, 2008)
China is giving farmers a 13% subsidy for home appliance purchase in order to stimulate sluggish rural consumption and to reduce the increasing trade surplus. The central and local governments will pay 80% and 20% respectively of the subsidy, according to the Ministry of Finance (MOF).
Recently, a pilot program was initiated in three major agricultural provinces -- eastern Shandong, central Henan and southwestern Sichuan -- where farmers who bought televisions, refrigerators and mobile phones could receive such a subsidy. There are 197 types of appliances under three catagories were available for the subsidies through the end of May for China 800 million farmers.
To date, the government has signed agreements with 15 household appliance makers in terms of providing products for rural areas, including Haier, Hisense and Changhong, and 21 dealers. To know more about the boosted market demand in rural area, please read China e-Outlook Feb report.
SMIC to set up fabs in Shenzhen(Feb 14, 2008)
Semiconductor Manufacturing International Corporation(SMIC), China's biggest chip manufacturer, announced that it would invest US$1.58 billion to build an IC R&D center and two IC chip production lines in Shenzhen, Guangdong province.
The R&D and production base for the front process of IC will be built in phases in this project and consist of an IC R&D center and two production lines for 8-inch chips and 12-inch chips, respectively. Advanced technology will be introduced from IBM for the 12-inch chip production line. The first-phase construction of the 8-inch production line will be launched in the first half of this year and completed at the end of 2009 and its initial monthly output is estimated at 30,000 to 50,000 chips.
China¡¯s CPI to rise 6.5% in January (Feb 5, 2008)
China¡¯s consumer prices index may grow 6.5% year over year in January, according a State Council press conference.
The recent unexpected storms in south China have had a severe impact on agricultural production. The impact on fresh vegetables was catastrophic in certain areas. By Jan 29, a total of 7 million hectares of farmland was hit by the snow, most of these lands located in the Yangtze River Delta.
China's consumer price index (CPI) rose 4.8% in 2007, with food prices, especially pork, as the major cause of the increase. It¡¯s expected to grow 6.5% in the first quarter of 2008.
China Mobile enhance TD network construction (Feb 5, 2008)
China Mobile is accelerating the construction of the homegrown TD-SCDMA networks in ten cities.
The company will complete the bidding for procurement of TD-SCDMA mobile phones after the Chinese New Year, put 40,000 terminals onto the market in March-April, and launch a large-scale terminal procurement before the 2008 Olympic Games.
At present, the construction of the TD network in Beijing has entered into the network optimization stage, with the deployment of base stations basically completed. And before that, Datang Mobile noted that it had opened all the over 2,000 base stations for the TD network, which means the TD networks in Beijing and Shanghai have completed base station deployment.
China to adjust import tariff on electronic products (Jan 12, 2008)
China has adjusted the temporary import tariffs and tariff items on some consumption-type electronic products, elements and special raw materials for electronic products, and the new import tariffs have come into force as of January 1, 2007.
After the adjustment, China has lowered the import tariffs on multi-crystal silicon, laser video player core precision miniature motor, video components for mobile phones, video camera, video-recorder, digital camera and other spares. However, the import tariff for spares of flat TV sets remains unchanged.
Tariff adjustment by the State this time will help popularize liquid crystal and plasma TV sets nationwide.
China publishes 11th five-year plan on IT (Jan 12, 2008)
China¡¯s Ministry of Information Industry has published the 11th Five-Year Plan (2006-2010) on five IT areas.
The five IT areas are integrated circuit, software, informatization, electronic basic materials and key components, and electronic special-purpose equipment and devices.
The ministry said that the plans are drafted on the basis of a series of research projects, broad discussions and studies.The ministry also published interpretation reports on the outline, targets, major tasks and development priority of the five sectors.
China-made satellite navigation system to serve Olympics (Dec 28, 2007)
A leading engineer for China's indigenous satellite navigation system said the new system would be used in guiding traffic and monitoring sports venues during the Beijing Olympics in summer 2008.
Chengqi Ran, deputy director of China Satellite Navigation Engineering Center, said the Compass Navigation Satellite System, which consists of five positioning satellites orbiting the Earth, will help alleviate traffic problems during the Olympics by providing detailed positioning information to individual drivers.
China had primarily constructed the experimental satellite navigation web by May 2003, via launching three Beidou satellites into space. In February and April 2007, another two satellites were separately sent into orbit. The cluster of five Beidou satellites will be comprised of the main infrastructure of the Chinese satellite navigation network.
China¡¯s new labor law takes effect (Dec 28, 2007)
China new labor contract law will be put into effect on Jan 1 2008, increasing cost of hires and lay-offs in China.
The 98-article law, approved by China's top legislature in June 2007, entitled staff with more than 10 years of service at a company the right to sign contracts protecting them from dismissal without cause. It required employers to contribute to their employees' social security accounts and set wage standards for workers on probation and overtime.
China to encourage listings in China¡¯s stock market(Dec 10, 2007)
China encourages overseas firms and Hong Kong-listed domestic companies to go public in Chinese mainland market, as the country seeks to enlarge the capacity of its capital market.
China has sped up the listing of large state-owned enterprises (SOEs) mainly in oil and chemicals, telecommunications, transportation and metallurgy industries in past few years.
All above shows China¡¯s desire of shaping itself to a multi-tier capital market in the world.
China to produce 500 million mobile phones in 2007 (Dec10, 2007)
China is likely to produce nearly 500 million mobile phones in 2007, according to the Ministry of Information Industry.
Of the total production, around 400 million mobile phones will be exported while the rest of 100 million served the domestic market. Mobile phones made by Chinese manufacturers accounted for 31.8% of the total output. Nokia and Motorola still made most of mobile phones in China.
China¡¯s fixed-line operators to lose subscribers(Nov 28,2007)
Two China¡¯s fixed-line operators are losing subscribers due to free for incoming call packages promoted by mobile operators and other reduced tariff for mobile communications services.
China Telecom noted that it recorded a decrease of 880,000 subscribers in October, marking the third monthly decline in a row. Meanwhile, China Netcom said it lost 370,000 subscribers in October, the fourth decline running.
By the end of October, China Telecom has 222.56 million fixed-line subscribers while the number of fixed-line subscribers with China Netcom is 114.11 million.
Regarding broadband subscribers, they saw net increases of 550,000 and 462,000 respectively in October, with their cumulative subscribers totaling 34.44 million and 18.83 million.
Freescale to explore China¡¯s rail transportation market through CEAC¡¯s assistance(Nov 28,2007)
Freescale Semiconductor recently established a joint lab with Zhuzhou CSR Times Electric Co. Ltd., (China's leading rail transportation company) for microelectronics applications. The Freescale-Times Electric Joint Lab is located in the technical center of Zhuzhou CSR Times Electric, Zhuzhou, Hunan province.
The joint lab is expected to encompass six core technologies, including power conversion, control and diagnosis, safety monitoring, information and communication, power electronics, and test and control. Joint development efforts are expected to focus on the following application systems: AC drive systems, train control and diagnostics, railway safe driving carriers, locomotive and passenger information, passenger train electrics and information, and electric and control systems for engineering mechanics.
This cooperation marked a major milestone in China's rail transportation industry and will help accelerate the development of local technology innovation and applications. Freescale's authorized distributor, China Electronic Appliance Shenzhen Co., Ltd (CEACSZ), has played a pivotal role in organizing this cooperative venture.
Lenovo plans to touch consumer PC market in 2008(Nov 28,2007)
Lenovo Group recently announced plans to enter into the consumer PC market in 2008, and the company is busy seeking manufacturing location.
The desktop manufacturing location has not been decided but the laptop production base is scheduled to stay in China. The spokesman of the German subsidiary of Lenovo recently announced that the company planned to develop a global strategy to enter into the retail sector of consumer PC market.
The location of Lenovo¡¯s manufacturing base is critical to component and semiconductor suppliers because this change will impact the company¡¯s demand for semiconductors and components in China.
China to release new catalogue on foreign investment(Nov 19,2007)
China recently released a new Catalogue of Industrial Guide to Foreign Investment, indicating that China will no longer implement the industrial policy that purely encourages exports.
Approved by the State Council, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOC) jointly released the new catalogue. This catalogue encourages more foreign investment to modern agriculture, high-tech industry, modern service industry, high-end manufacturing links and infrastructure facilities.The revision has listed all contents concerning access by foreign investment into the catalogue, forming a standardized and transparent access policy for foreign investment.
It will take effect on December 1, 2007.
SMIC starts making TD-SCDMA chips (Nov 19,2007)
Shanghai-based Semiconductor Manufacturing International Corporation (SMIC) recently started production of 20,000 TD-SCDMA chips.
The 0.13-mm TD-SCDMA chip was designed by Chongqing Chongyou Information Technology Co., Ltd. With proprietary intellectual right, this type of chips has been applied in terminal producers in Shanghai and Suzhou.
CNC works with Willcom on PHS(Nov 19,2007)
Japanese mobile operator Willcom recently announced that it has reached an agreement with China Network Communications Corporation (CNC) on research and technology cooperation that covers data telecom services in China's market.
CNC is the parent company of China Netcom Group Corporation (Hong Kong) Limited, the second largest fixed operator in China. Willcom is the only PHS service provider in Japan now.
The cooperation will focus on PHS Internet-access service and also involve the new-generation PHS, which is being developed by Willcom. CNC also has a plan to join hands with Willcom in providing PHS roaming service for the 2008 Beijing Olympic Games.
COC conducts 2007 China Electronics Summit during the 70th China Electronics Fair(Nov 11,2007)
China Outlook Consulting will co-conduct the 2007 China Electronics Summit with China Electronic Exhibition & Information Communication Company on Nov 15 2007 in Shanghai during the 70th China Electronics Fair.
With supports from China's Ministry of Information Industry, China's Electronics Enterprises Association and China Center for Information Industry Development, this summit is to help local Chinese OEMs and component manufacturers to explore their business opportunties and to enhance their cooperations and communications with distributors and other market channels.
Speakers for this summit includes officials from the Ministry of Information Industry, executives from Rochestor Electronics, The Broker Forum, Holystone Electronics and China's top online service provider-- Beijing Zhongfa Group.
Foreign companies in China follow China¡¯s RoHs(Nov 11,2007)
Foreign companies in China have more actively participated China¡¯s RoHs implementation, a regulation of Controlling Pollution of Electronics and Information Products starting from March 1, 2007.
For instance, Sharp, the largest LCD TV producer of Japan has stressed the use of environmental protection material in the panel TV market competition. According to the company, resin has made up about 40% of all materials for its panel TV, much higher than the percentage for CRT TV. The company has also applied a new type of reclaimable resin to some models of LCD TV products, which may reduce the electricity consumption by nearly three-tenth as compared with CRT TV. Matsushita has developed new display tube materials and additive of plasma TV harmless and scraps the use of lead in an all-round way.
Currently, there are only 13 domestic enterprises have participated in the working group of controlling the pollution of electronics and information products organized by the Ministry of Information after the implementation of the Chinese ROHS, while 74 foreign companies including Intel, Sharp, Sony, Nokia and Siemens joined the group.
Intel invests in China¡¯s automation company(Nov 11,2007)
Intel Capital has invested US$10.5 million in a Chinese automation technology company Supcon Group. The investment was channeled into the group's subsidiary Zhejiang Supcon Technology Co., Ltd.
According to a statement announced by the two companies, Supcon will cooperate with Intel in development and promotion of Intel's industrial automation solutions in China. Intel will support Supcon's global productions and sales, and help the latter to expand business outside China.
Based in Hangzhou, Zhejiang province, the Supcon Group is one of the leading Chinese firms that specialize in distributed control systems (DCS), a manufacturing control system. It has more than 5,000 customers in fields including petrochemical, chemical, power and food processing.
SMIC suffers loss in Q3(Nov 11,2007)
Semiconductor Manufacturing International Corporation (SMIC), China¡¯s leading semiconductor foundry, recently released its Q3 financial report showing a loss of US$25.6 million.
According to the quarterly financial statistics, 23.6% of the company¡¯s revenue in the third quarter came from DRAM chip business, compared with 28.9% in the quarter.
Richard Chang, Chief Executive Officer of SMIC noted that the company¡¯s business was severely affected by ongoing severe price declines in the DRAM market despite the strength of non-DRAM foundry services. The company forecasts that the forth quarter would see a 2-5% climb in total sales but will still suffer loss in Q4.
China to stop licensing mobile phone manufacturers(Nov 1,2007)
China recently announced to stop the verification mechanism on mobile phone manufacturers, ending the license system in mobile phone manufacturing sector.
Currently, there are about 90 licensed handset manufacturers in China. Based on the verification regulation that started in February 2005, if a company wants to become a licensed handset maker in China, government officials will assess the company to see if its investment, R&D forces, and manufacturing capacities have reached the required level.
China¡¯s mobile phone manufacturing capacity is estimated to exceed 500 million units in 2007. During the first 8 months of 2007, China made 347 million mobile phones, according to statistics from the Ministry of Information Industry (MII).
ZTE to become China's largest CDMA equipment provider(Nov 1,2007)
China's leading telecom equipment provider ZTE will replace Ericsson to provide CDMA base stations and other equipment to China's only CDMA network operator China Unicom in several provinces and cities, according to China Business News.
That will make the company China's largest CDMA equipment provider, with market share exceeding 30%.
According to ZTE, it has seen shares in China Unicom¡¯s bidding for CDMA equipment grow from 7.55% in the first phase to 14.44% in the second phase and 21.23% in the third phase. Thus, after Ericsson¡¯s quitting and ZTE¡¯s taking it over, the status on China's CDMA market will be shown as the following chart.
Freescale expands business in China(Nov 1,2007)
The Freescale, Inc. opened a new design center in Chengdu, Sichuan province recently, indicating the company¡¯s expanding investment in China's market.
Michel Mayer, chairman of the board and CEO of the company, said China has offered a great development opportunity for Freescale. The company¡¯s packaging and testing organ in Tianjin reported a steady growth and its operations in Shanghai has been expanded three times as large as it was founded. Mayer noted Freescale is investing in China's big amount of engineering and business talents, so as to provide service for its potential customers and support its development plan.
Freescale began its business in China in 1992. It also has eight design labs in Beijing, Tianjin, Shanghai,Suzhou and Chengdu.
China¡¯s industrial added value grows 18.4% (Oct 21,2007)
China¡¯s industrial added value of large companies grew 18.4% in the first eight months of this year, 1.1% higher than the growth in the same period of last year, according to the National Development and Reform Commission (NDRC).
Price of capital goods rose 1% in August as compared with the previous month; price of raw materials, fuel and power increased 3.8%, up 0.2 percentage points month on month.
China's mobile phone subscribers to reach 515 million(Oct 21,2007)
China's mobile phone users exceeded 515 million by the end of August this year, with a monthly rise of 6.8 million on average, according to statistics from the Ministry of Information Industry (MII). Chinese cell phone users had sent a total of 378.5 billion short text messages by the end of August, up 38.3% year on year.
Since last year, China's rural area has seen a continued demand for cell phones, which also boosted the handset output, the MII said. According to the MII, China produced 347.6 million mobile phones between January and August, up 28% over the same period last year.
China's LCD TV production rises 77% (Oct 21,2007)
China produced 9.4 million liquid crystal display (LCD) TV sets in the first eight months of this year, up 77.1% from a year ago, according to the Ministry of Information Industry.
In the Jan.-August period, one out of five China-made color TV products was an LCD set, while the model accounted for only 10.8% of the total output in the same period of last year.
China¡¯s LCD manufacturing output accounted for more than 50% of the world's total output, making China an important manufacturing base for LCD TV products.
SMIC be weak in performance(Oct 8,2007)
Semiconductor Manufacturing International Corporation(SMIC) still saw its share price weak on Hongkong stock exchange market, closing at 0.89 HK dollars on September 21, down from the previous close of 0.92 HK dollars.
The weak share price might be related to the increase of the company¡¯s marketing cost and decrease of its product price.
Although SMIC¡¯s H1 sales revenue rose 7% to 763 million US dollars from 712 million in the first half of last year, its marketing cost increased 8.9%, which resulted in the decline of gross margin. Meanwhile, its average price of products dropped 7.5% to 854 US dollars in the first six months of 2007.
The company forecasted that it would achieve better results in 2008 thanks to the advanced 65-nm technology.
China embrace foreign investment(Oct 8,2007)
China welcomes more international hi-tech companies to set up regional headquarters, R&D centers, procurement centers and training centers in China, and encourages domestic enterprises to explore overseas hi-tech markets, according to Xiaoqiang Zhang, vice minister of the National Development and Reform Commission.
Zhang noted China's hi-tech industry had utilized more and more foreign investment over the last two decades and multinational companies had set up more than 1,000 research institutions all over the country.
The hi-tech industry in the three coastal regions of the Yangtze River Delta, the Pearl River Delta and Bohai Bay accounts for more than 80% of the national total in terms of scale of industry. Major industries include bio-medicine, aviation and aerospace, micro-electronics, photoelectron and software.
China plans to focus on nine major special projects in the next few years, including integrated circuit and software, new generation mobile communication, next generation Internet, digital voice and video technologies, advanced computing, biological medicine, commercial airplanes, satellite as well as new materials.
China¡¯s electronics import and export slows down(Oct 8, 2007)
China¡¯s import and export value of electronic and information products reached US$490.16 billion in the first eight months of this year, up 23.5% year on year, according to the Ministry of Information Industry.
The growth rate was down 12.8 percentage points from the same period of last year, and also 0.5 percentage point lower than that of the nation¡¯s total import and export in the first eight months of this year.
The eight-month export value of electronics and information products came to 276.37 billion US dollars, up 26.2% year on year. The growth rate was 11.7 percentage points lower than that for the same period of last year and also 1.5 percentage points lower than that of the nation¡¯s total export in the first eight months of this year. The export accounted for 36.1% of the nation¡¯s total export and contributed 9.6 percentage points to the nation¡¯s 27.7% export growth in January-August.
Foreign investment in China rises 12.8%(Sept 17,2007)
China actually used US$41.9 foreign direct investment, in the first eight months this year, up 12.8% YOY, according to the Ministry of Commerce.
China approved the establishment of 24,848 foreign-funded companies in the same period, down 5.26% YOY. In August, the establishment of 3,150 foreign-funded firms were approved, down 8.83% YOY, while the actual use of foreign investment went up 11.87% to US$5.02bn.
Currently, more than 28 million people, or about 10% of the employed population in cities and towns of the country, work for foreign-funded companies.
China¡¯s computer and home appliances profitable at 1H2007(Sept 17,2007)
China's computer and home electrical appliances sectors recorded an impressive growth in profits during the first half of 2007, according to the Ministry of Information Industry.
Computer sector managed sales revenue of US$15.2bn, growing 14% year over year(YOY); profits from computer sector hit US$360 million, growing 600% YOY. Home appliance sector gained US$33.28bn sales revenue with annual growth of 12%. Profits from this sector reached US$480 million, up 513% YOY.
Intel starts building chip plant in China(Sept 17,2007)
Intel Corp. started building its first chipset plant in Asia, which involves US$2.5 bn in the first stage investment. The new factory, dubbed "Fab 68", will use 90-nanometer technology, the most advanced technology that the U.S. government has licensed for export.
Intel Chairman Craig Barrett attended the ground breaking ceremony of the plant, which is located in the Dalian Economic and Technological Development Zone in northeast China. Barrett said at the ceremony that Intel chose Dalian because it is a perfectly suitable location for the plant. "Intel will use its advanced equipment and technology to build an environment-friendly computer chip factory in the city, and promote the semiconductor manufacturing industry in China," he said.
Steel structures and other framework works have been in place at the factory covering 160,000 square meters. The project will go into production in 2010.
China's electronics export hits US$235.32bn(Sept 7,2007)
China's electronics export hit US$235.32bn in the first seven month of 2007, grew 25.9% year on year(YOY). This accounted for 36% of China's total export, according to statistics from the Ministry of Information Industry. Export from wholly foreign owned companies in China grew 26.9% to reach US$158.65bn during this period of time, accounting for 67.4% of China's total electronics export.
China's electronics import grew 19.3% YOY to reach US$182.09bn, accounting for 35.2% of China's total import.
Changhong works with 081 Electric Group(Sept 7,2007)
China's leading home appliance maker Changhong Electric Co., Ltd recently signed a strategic agreement with a military industrial company named 081 Electric Group, and the government of TGuangyuan city, Sichuan province.
Meanwhile, Changhong launched the Changhong Xinrui power supply project in Guangyuan Economic Development Zone as the first project for its wholly funded Changhong 081 industrial park.
Changhong expects the park to become a large research, product development and manufacturing base for both military use and civil use in Southwest China.
Qimonda expands foundry service with SMIC(Sept 7,2007)
Qimonda AG and Semiconductor Manufacturing International Cor.(SMIC) signed an agreement to expand their existing cooperation on the production of DRAMs.
Based on the agreement, Qimonda will transfer its 80nm DRAM trench technology to SMIC's 300nm facility in Beijing and SMIC will make DRAMs for computer products by using this technology exclusively for Qimonda. Futhermore, this agreement also includes the option to transfer Qimonda's 75nm technology to SMIC in the future.
Qimonda is a leading global memory supplier with a broad diversified DRAM product portfolio. The company carved from Infineon Technologies which is customer of SMIC. UP to date, Infineon holds an 86% stake of Qimonda.
China Mobile to complete TD-SCDMA base station(Aug 12, 2007)
China Mobile just completed TD-SCDMA base station in Qinghuangdao. This network is expected to cover the urban city, primarily focusing on tourism locations and hotels for Olympics 2008, suburb still excluded.
Qinghuangdao was planned as the first city to build China Mobile¡¯s TD-SCDMA base station More than 300 cell sites were laid in the city zone, while macro cell sites were constructed in the suburbs, and each cell site could accommodate about 300 terminals. All of these cell sites bring the total accommodation of TD-SCDMA network in Qinghuangdao up to 450,000 users.
At present, TD-SCDMA network is under optimization, through which, the network parameter could be fine-tuned, deviations of network plan be corrected, and thus providing data reference for the future network plan.
Lenovo to serve rural market(Aug 12, 2007)
Lenovo Group served China¡¯s rural market by providing PC priced at US$199. The company announced to establish 5,000 new marketing agencies to provide after-sales services to a maximum of 300,000 administrative villages. Meanwhile, the company would carry out promotional campaigns in townships.
"We have offered rural distributors products priced between US$199 and US$399," said Shaopeng Chen, president of Lenovo Greater China, adding that new software developed to cultivate rural customers' computer literacy was part of the PC products. "We continue to invest in the rural market because it helps us achieve a growth rate double the market average," Chen said.
Three years ago, Lenovo released computers priced at US$399 to cultivate what it termed the "frozen earth" in rural regions. Its rivals had to match the price in order to continue their expansion into the rural market.
Changhong builds automotive electronics manufacturing base in Changchun(Aug 12, 2007)
Sichuan Changhong Electronic, one of the largest TV makers in China, announced to build an industrial park in Changchu, Jiling province to make automotive electronics products.
Changhong Changchun Industrial Park will focus on manufacturing automotive electronics products and digital home appliances such as GPS navigation systems and car television.
This park expects to start production in Jan 2008. The initiative of establishing this industrial park is to explore North China market as well as the markets of Russian, North Korean and Mongolian. This park expects to have 5 billion RMB sales revenue in 2012.
Foxconn set up a new industrial park(Aug 2, 2007)
Foxconn announced to invest US$1 billion to set up a new industrial park in Qinghuangdao, Hebei province. This park will host plants that manufacture electronics products including printed circuit boards and signal transmitters as well as nano-technology research and development centers.
This plan can be regarded as Foxconn¡¯s strategic move from east cost area to the North part of China to avoid increased cost of land and labors and to satisfy the new market demand from North part of China. Early in Feb this year, Foxconn also invested US$99 million dollars in Langfang , Hebei province to establish manufacturing facility to make handset for international handset OEMs like Nokia.
China¡¯s broadband users hit nearly 60 million(Aug 2, 2007)
China¡¯s broadband users hit nearly 59.43 million while dial-in users dropped to 21.61 million according the Ministry of Information industry.
The 2008 Beijing Olympic Games, governmental digitalization plan, increase of PC for education and family use are three major market drivers to boost the market.
China Telecom and Netcom are the major operators to provide broadband service in China. Details please see the August report of China e-Outlook.
Auto-used MCU in demand in China(Aug 2, 2007)
China¡¯s market demand for auto-used MCU has been boosted driven by China¡¯s increasing automobile output. In 2006, China¡¯s automobile output reached 7.3 million units and will expect to grow 30% in 2007.
Airbags, ABS and TPMS are major products to consume auto-used MCU in China. Major MCU suppliers in China are Infineon, Freescale, STMicroelectronics and Renesas. For details about how airbags created market demand for MCUs and know China¡¯s major airbag manufactuers please read China e-Outlook August report.
China to coperate with ITU(July 24, 2007)
China will cooperate will the International Telecommunication Union (ITU) regarding radio frequency and satellite orbit resources and the development of global telecommunication standards.
Peiyan Zeng, vice premier of China, recently met with ITU Secretary General Hamadoun Toure and noted that China is ready to enhance cooperation with ITU.
In response, Toure appreciated China's support for ITU over the years, expressing his hope to enhance cooperation with China and further promote the development of global information and communication technologies and bridge digital divide.ITU, founded in 1865, is a United Nations agency for telecommunications with 191 member states. China joined the ITU in 1920.
China sells over 200 million handsets at 1H2007 in China(July 24, 2007)
China's domestic handset shipment hit 266.8 million units during the first six months of 2007, growing 33.4% year-on-year(YOY), according to the Ministry of Information Industry (MII).Sales revenue hit US$21.2 billion, up 29.6% YOY.
Nokia still topped No.1 by serving 35% of the total domestic GSM handset market through targeting both high-end and low-end customers.
Thomson works with Jiuzhou on DTV production(July 3, 2007)
France-based Thomson recently announced to work together with tSichuan Jiuzhou Electric Group Co., Ltd. on digital TV production.
Being one of the largest high-tech electronics company and one of the most famous transnational group companies in the world, Thomoson can share with Jiuzhou their technology development in DTV area.
Sichuan Jiuzhou Electronic Technology Co., Ltd. is one of the largest industrial companies and the best profit-making companies in Sichuan, dealing with research & development and production of digital TV equipment, broadband network equipment and satellite TV receiving equipment.
Vimicro to release web camera processing chip(July 3, 2007)
Vimicro Corporation, a leading semiconductor company in China, released a high-performance web camera processing chip VC0336 recently, marking the startup of Internet video applications in Web 2.0.
The VC0336 is mainly used in attachable web cameras and laptop-embedded cameras and enjoys a string of functions such as high-definition video recording, audio recording, auto focus, and audio noise cancellation.
It is equipped with two quality audio channels, which allow PC cameras to record two streams of audio signals from two different microphones simultaneously. At present, some leading web camera and notebook producers of the world have already employed the VC0336.
Lenovo eyes on consumer market (July 3, 2007)
Lenovo Group try to improve the weight of sales from consumer market in 2007, said Yang Yuanqing, board chairman of Lenovo.
Currently, 90% of Lenovo¡¯s sales come from business-use market, and 10% from consumer market. Notebook business will be a focal point.
Lenovo achieved the first-ever profitability in North America since it acquired the PC unit of IBM for the fourth quarter of its 2006/07 fiscal year.
Microsoft launches Chongqing Technical center(July 3, 2007)
Microsoft (China) Co. Ltd and Chongqing Municipal Government recently signed a memorandum of understanding on jointly launching ¡°Chongqing Microsoft Technical Center¡±.
According to the memorandum of understanding, the two parties will use the center to promote R&D software products, construct e-administration and software personnel training in Chongqing. Meanwhile, Microsoft will cooperate with telecom operators in constructing an information service platform catering to small and medium-sized companies.
The two parties aim to expand their cooperation and enhance the software information service level in Chongqing
China Mobile starts TD-SCDMA network construction in eight cities(June 3, 2007)
China Mobile starts the construction of TD-SCDMA networks in eight Chinese cities at the end of May. The construction project is predicted to take six months and will be finished by October this year, which will ultimately produce 13,000 base stations.
China Mobile has authorized China International Telecommunication Construction Corporation, a subsidiary of China P&T Appliances, to undertake the project.
According to Haofei Chen, Secretary General of TD-SCDMA Forum, the purchase of TD-SCDMA mobile terminals will be started in October this year, after the construction of 3G networks in ten Chinese cities is completed.
China Telecom, SMG and Yongle to expand Shanghai IPTV market (June 3, 2007)
China Telecom, Shanghai Media Group(SMG) and household appliances retailer Yongle will work together to popularize IPTV (Internet protocol television) in Shanghai.
Based on their announcement, Yongle will act as the exclusive channel of IPTV in Shanghai to accept applications for opening IPTV service in all its chain shops. China Telecom will provide operation supports in their cooperation, while SMG will provide video contents.
China Telecom has kept expanding its investment in IPTV since last September. The company is trying to make Shanghai the largest IPTV service subscriber city in China.
LG to volumn manufacture PDP monitor in China(June 3, 2007)
LG Electronics plans to batch production of 32-inch PDP monitor in China in June despite its loss in the Q12007.
A senior official with LG said the batch production of 32-inch PDP monitor would be at LG¡¯s Nanjing facilities. Nanjing is capital of east China¡¯s Jiangsu Province.
Industrial professional said that 32-inch PDP monitor has price advantage compared with the same size LCD monitor.
Lenovo¡¯s efforts overseas paying off(June 3, 2007)
Lenovo Group for the first time posted an all-round profitability from its major operating areas, including North America, where the Chinese PC giant has been struggling since it acquired IBM¡¯s PC unit in 2005.
PC shipments in the Americas grew 9% in the fiscal Q4 ended on March 31, reversing the declining trend in the previous quarters. Business turnover in the region hit US$997 million at Q12007, accounting for 29% of the group¡¯s total, and marking a turnaround from loss to profit for the first time. Together with revenue of 731 million dollars from Europe, Middle East and Africa, the combined turnover accounted for 50% of the total, which indicated that the Chinese PC maker is no longer relying solely on the robust domestic market and its efforts overseas are paying off.
Through sponsoring sports activities and cutting payrolls, gross margin of the company set a record high of 14% for the 2006-2007 fiscal year, and PC shipment increased 12% year on year, higher than the industry¡¯s growth of 10% on average.
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