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Home arrow Market Research Findings arrow Information Technology arrow Actions Not Words from Chinese Semiconductor Suppliers
Actions Not Words from Chinese Semiconductor Suppliers PDF Print E-mail
26 Feb 2006

Actions Not Words from Chinese Semiconductor Suppliers - 27 February 2006 
Interest in the West to the growth potential of the Chinese semiconductor industry seems to grow at an equally fast rate as the industry itself. Few executives of established semiconductor companies need reminding of the long term threat posed by the Chinese, but perhaps not so many are aware of the short term threat just around the corner. This fact can perhaps be best demonstrated by looking at the 2005 financial results of two successful companies supplying chipsets for portable audio players, arguably one of the hottest applications in the electronics industry at present.

Many are aware of PortalPlayer, the Silicon Valley-based outfit which supplies the SoC for most of Apple’s iPod players. 2005 fiscal revenues were announced in January of $225 million, up from $92 million the previous year. An impressive 244% growth. Now consider the results of Actions Semiconductor, a Guangdong-based semiconductor company. Heard of them? No, then you are probably not alone, and for a company established only in 2001 and that doesn’t have either a US or European office, that is perhaps not too surprising.

However they are doing very nicely indeed from supplying SoCs for audio players to many of the indigenous Chinese makers. 2005 fiscal revenues were announced in January of $150 million, up from $57 million the previous year. An equally impressive 263% growth. These levels of revenues will do nothing to have the Intels and Samsungs of the world quaking in their shoes and both companies have a long way to go to challenge the “established order”.

Colin Barnden, Research Director for IMS Research’s Semiconductor Group commented “These financial results clearly indicate that any semiconductor company with the right mix of products, price and service can succeed today, be they American, European, Japanese, Korean...or Chinese”.

Considering further that the leading Chinese semiconductor foundries (such as CSMC and SMIC) are growing rapidly and that their technical abilities are improving in leaps and bounds, Actions Semiconductor's rapid emergence is unlikely to be an isolated case. That far off threat might yet prove to be right on the doorstep. The Chinese are demonstrating their intent with actions. The established order must be careful not to be left only with words.

About IMS Research
IMS Research is a specialist supplier of market research and consultancy services on global electronics markets. Information from IMS Research is used by major companies worldwide to assess market trends, solve marketing problems, and improve the efficiency of their businesses. IMS Research is an international company, selling in more than 35 countries around the world and is supported by headquarters in Wellingborough, UK and an office in Austin, Texas. IMS Research’s Wireless Group provides consultancy services and detailed databases and reports on the cellular, mobile radio and short-range wireless markets.

*IMS Research is always willing to work with journalists to provide market information for articles.

For further information, please contact:
Colin Barnden, Research Director, Semiconductor Research Group
IMS Research
Tel:+44 (0) 1933 402255
Fax:+44 (0) 1933 402266
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Last Updated ( 13 Apr 2006 )
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