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Position:DATABASE AND NETWORK INTELLIGENCE - China expand footprint in the global semiconductor market - Industry overview

China continues to expand its footprint in the global semiconductor marketplace

Throughout the last eight years of ups and downs in the semiconductor industry, the Chinese market has continued to outperform the rest of the world according to a new report from PwC, "China's impact on the semiconductor industry: 2010 update report".

Raman Chitkara, Global Technology Industry Leader, PwC said: "China continues to expand its footprint in the global semiconductor market place. China now accounts for 41% of global semiconductor consumption, over 50% of global semiconductor initial public offerings and employs 25% of the total global semiconductor workforce."

China continues to dominate electronic manufacturing with an increasing share of the global production of electronic devices. Led by this global domination in electronic manufacturing, and supplemented by increasing domestic consumption by a growing middle class, China continues to grow its share of global consumption of semiconductors.

Another shining star in China's semiconductor industry is its rapidly growing fabless sector which grew by 17% in 2009 to reach a record US$4 billion. While its share of the global semiconductor production is growing, China's production of semiconductors is not keeping pace with the growth in its consumption. This is resulting in an ever increasing gap that has reached US$67 billion.

The growth of semiconductor production in China has been led primarily by multinational integrated device manufacturers (IDMs) that account for four of the five largest semiconductor enterprises in China. Domestic Chinese semiconductor manufacturers are not growing at the accelerated pace that some had forecasted earlier in the decade

Managing the workforce

The Chinese workforce employed in the semiconductor industry has been growing at a rate of 10% per year for the past five years and now accounts for 25% of the global semiconductor workforce. However, the growth in the workforce has brought an increase in labour turnover for many companies, which has led to wage increases by several semiconductor companies to stabilise the work force. While China continues to offer some of the lowest labour costs in the world, these costs are expected to increase as the Chinese semiconductor workforce grows and matures. Therefore proactively managing the workforce is a challenge that is expected to be of greater management focus in the coming years.


The semiconductor industry has...

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