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Press Releases
​Revenue Growth in China's Semiconductor Industry Would Slow Down to 16.2% in 2019 due to Pessimistic


Telecommunications , Semiconductors

According to the latest report by TrendForce - Breakdown Analysis of China’s Semiconductor Industry, the outlook for China’s semiconductor industry has been tampered since the second half of 2018 due to pessimistic economy worldwide and uncertainties brought by the China-US trade war, although the industry managed to reach a total revenue of over 600 billion RMB in 2018 Looking ahead to 2019, the revenue of China's semiconductor industry is expected to reach RMB 7298 billion, but the annual growth rate would slow down to 1620%, the lowest in the past five years According to Jeter Teo, Research Director at TrendForce, there would be several challenges for China's semiconductor industry in the coming year, including the global economic slowdown, the overall weak demand, the negative growth in global smartphone production volume, as well as the continued trade conflicts between China and the United States However, as the Chinese government continues to seek self-sufficiency of chips and aims at reducing its dependence on foreign companies, the domestic semiconductor industry will keep growing On the other hand, new applications will trigger increasing demand for semiconductors, driven by emerging technologies like AI, 5G, autonomous driving, electric vehicles, CIS, biometric recognition, Internet of Things, and edge computing It is worth noting that, recent years have seen the rise of China's domestic IC design industry, which has played a key role in leading the development of China's semiconductor industry The industrial structure has continued to be optimized as well For 2019, the sector of IC design is expected to account for 4062% of China's semiconductor industry, while IC manufacturing would account for 2868%, IC testing and packaging would take about 307% On the other hand, TrendForce’s data show that key sectors of the semiconductor industry are expected to register continued growth in revenue, with the growth rate of IC manufacturing reaching 1858%, higher than 1786% of IC design and 12% of IC testing and packaging More than 10 new fabs for 12-inch wafer will enter production in China in 2019, while some 8-inch wafer fabs and the power semiconductor sector anticipate production expansion

Press Releases
TrendForce Says the Chinese Government Continues “Big Fund” to Support Key Semiconductor Sectors in China Including Memory and IC Design



China’s semiconductor industry has been thriving since 2015 driven by the Chinese government’s supportive policy and industry fund, with the revenue expected to exceed RMB 620 billion in 2018 According to TrendForce’s latest report Breakdown Analysis of China’s Semiconductor Industry, the Chinese government will continue supporting heavily in this industry at levels of central government and local authorities In addition to assisting weak yet significant nodes in the industry chain, the National IC Investment Fund (called the "Big Fund") will mainly focus on three key sectors in the coming years, including memory, SiC/GaN compound semiconductor, and IC design with its application in IoT, 5G, AI, smart vehicles, etc The year 2014 is a turning point for China’s semiconductor industry with the government’s announcement of National IC Industry Development Outline in June and the “Big Fund" in September, points out by Jeter Teo, research director of TrendForce The government used to offer research and development rewards, tax reduction and land subsidies, but this is the first time for the state to set investment fund and adopt market-oriented approaches like mergers and acquisitions to enhance the manufacturing capacity and international competitiveness of China's semiconductor industry With the support of the “Big Fund" by far, Tsinghua Unigroup bought Spreadtrum and RDA, Jiangsu Changjiang Electronics Technology Co, Ltd (JCET) acquired STATS ChipPAC and grew to a global top 3 IC testing and packaging company, Tongfu Microelectronics Co, Ltd(TFME) launched new joint venture combining AMD’s high-volume assembly, test and packaging facilities(ATMP) In addition, steps have been taken to increase domestic IC production As the result, China’s semiconductor industry has made progress regarding both quality and quantity, shortening the gap between China and other foreign rivals The first phase of “Big Fund” invests mainly on IC manufacturing, while the second phase will have higher investment proportion on IC design By September 2017, the first phase of the “Big Fund” has raised RMB 13872 billion, a total investment in 55 projects, reports TrendForce The promised funding is RMB 1003 billion and the actual investment is RMB 653 billion, of which IC manufacturing accounts for the largest proportion (65%) At present, the second phase of the “Big Fund” is being raised, which is estimated to reach RMB 150-200 billion The investment projects will also be adjusted TrendForce forecast estimates that the proportion in IC design will increase to 20%-25 %, and the investment projects will also be expanded to potential startups On the other hand, China’s strategy of developing domestic semiconductor industry has witnessed a clear trend - the central government drives local development By June 2017, the amount of local semiconductor industry investment funds has reached RMB 5145 billion in line with the “Big Fund”, of which the largest one accounts for RMB 50 billion In response to the central government's strategy, local authorities have put forward special policies for the semiconductor industry, which cover funding, research and development, investment, innovation and talent, etc This shows that local authorities not only have the determination to develop semiconductor industry, but also initiative substantial practical support In addition, driven by local governments’ active involvement in semiconductor industry, some cities will grow more prominent, which will also lead to changes in the China’s semiconductor industry structure in the coming years, points out TrendForce Hefei, Xiamen and Jinjiang are expected to emerge as major industrial regions of China's new generation of semiconductor industry  To learn more about the Breakdown Analysis of China’s Semiconductor Industry report, please visit: http://wwwdramexchangecom/Intelligence/china_semiconductor_industry_trend_report_and_analysis

Press Releases
Total Revenue of China’s IC Industry to Grow Above Global Average at Annual Rate of 19.86% for 2018, Says TrendForce



According to its latest report Breakdown Analysis of China’s Semiconductor Industry, TrendForce estimates that the total annual revenue generated by the country’s domestic IC industry for 2017 will come to RMB 5176 billion, representing an increase of 1939% from 2016 TrendForce further forecasts that total revenue of China’s IC industry for 2018 will come to a new record high of around RMB 620 billion, with the annual growth again reaching around the 20% level By contrast, the average revenue growth rate of the worldwide IC industry for 2018 is projected at 34% “Developments in China’s IC industry is driven by import substitution demand, government policies, major funding sources and innovative applications for semiconductor technologies,” noted Jeter Teo, research director of TrendForce “Currently, key products in China’s IC market such as processors and memory components are still imported from overseas China in fact has imported more than RMB 14 trillion worth of IC products annually for four consecutive years, from 2012 to 2016 Therefore, increasing domestic IC production has become a critical mission for the Chinese government” China’s recent policies show that the country is more determined than ever to develop its domestic IC industry The establishment of the National IC Investment Fund in 2014 signaled that the Chinese government has changed its approach to supporting domestic IC companies Rather than just providing subsidies to companies like before, the Chinese government is now actively reorganizing the industry by financially backing effective M&A deals According to data, the National IC Investment Fund already raised RMB 1387 billion in its first round of fundraising The total sum raised by other local funds in China for the building of the domestic IC industry has also exceeded RMB 500 billion In the past, IC demand in China mainly came from smartphones, tablets and other consumer electronics products Going forward, the Internet of Things (IoT), artificial intelligence (AI), 5G networking and connected smart vehicles will be the innovative applications generating growth opportunities for the domestic IC industry China’s IC industry has also undergone structural changes as seen in the revenue shares taken by different sectors within the industry over the recent years “For the first time, IC design houses took more of the industry’s total revenue than testing and packaging provider in 2016,” Teo pointed out “Within the 2017 to 2018 period, the IC design section of the domestic supply chain is going to keep growing This growth will be attributed to the IoT market, where AI and 5G solutions will be driving the expansionary momentum Other revenue opportunities will come from emerging applications such as biometric sensor hardware for fingerprint and facial recognition, dual-lens camera and AMOLED In 2018, the revenue share of IC design houses in the Chinese IC industry is forecast to reach 388%, the largest among all sections” As for developments in China’s IC manufacturing, the country currently has 22 fabs for 12-inch wafers and 18 fabs for 8-inch wafers Out of the total number of 12-inch wafer fabs, eight are still under construction Among the 8-inch wafer fabs, five are also being built The revenue share of the manufacturing section in China’s IC supply chain is forecast to expand rapidly to 2848% in 2018 as more fabs are expected to be in operation during the coming year The outlook for China’s IC testing and packaging sector is positive as well Domestic testing and packaging providers have benefitted from the formation of industry clusters across the country Furthermore, their capabilities to produce high-end solutions are expected to mature as they obtain or develop advanced technologies and build up their production capacities Considering various factors including the gradual advances on the technology front and the steady increases in volume of product orders, TrendForce believes China’s IC testing and packaging industry as a whole will maintain double-digit revenue growth for 2017 and 2018 Additionally, the upstream sectors of the China’s IC industry, such as material and equipment suppliers, can take advantage of the demand created by the significant number of domestic fabs that are scheduled to enter volume production in 2018 Thus, future developments in the upstream are also being watched closely by China’s national and local IC funds as well as by other investment groups To learn more about the Breakdown Analysis of China’s Semiconductor Industry report, please visit: http://wwwdramexchangecom/Intelligence/china_semiconductor_industry_trend_report_and_analysis

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