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Wafer foundry industry is closely relevant to prosper of IC design industry. In 2005H2-2006H1, IC design industry enjoyed a period of fast growth, but crisis turned up then. Presently, wafer fabs have a faster production speed than the sales, which led to the increasing inventories. Semiconductor suppliers march towards their sales goals. Yet, the originally predicted growth rates of PC, handset and semiconductor were lowered because of economic uncertainty.
In Jan-Sep, 2006, inventories in supply chain kept a fast consecutive growth. Since chip producers wish to reduce production for effective control on inventories, capacity utilization ratio of Fabs dropped. Afterwards, inventories in supply chain declined. With the situation of American market, they increased production capacities again, which resulted in an increase in inventories. In March of 2007, the inventories in industry chain increased to the highest level since the year 2001. There is a steady growth of handset related chip inventories. Inventories in analog field are at normal level. Most manufacturers obtain increasing orders particularly for high-performance analog parts.
The semiconductor industry in mainland China also declined.
In the first half of 2007, the total output of IC chips in mainland China arrived at 19.274 billion units or so, up 15.2% from a year earlier. The sales income of IC industry amounted to RMB 60.72 billion, with an annual growth rate of 33.2%. But the figure sharply dropped compared to the high growth rate of 48% in the first half of 2006. As far as IC industry chain is concerned, the sales income of IC design industry in mainland China got to RMB 9.532 billion, with an annual growth rate of 22.8%, far behind the high growth rate of 50.8% in the first half of 2006. This is mainly affected by the saturation trend and price falling of terminal (MP3 and digital camera, etc.) markets. The performance of such representative IC design companies as Vimicro, Actions Semiconductor Co., Ltd., and Solomon Systech can reflect the development of China IC design industry.
In 2006, the net revenue of Vimicro amounted to USD 126.6 million, while the figure in 2005 was USD 95.3 million. Abide by the Generally Accepted Accounting Principles, the net profit of Vimicro in 2006 reached USD 9.7 million, while the figure in 2005 was USD 16.4 million. In the first quarter of 2007, the net income of Vimicro was up to USD 16.9 million, and the figure got to USD 26.4 million in the same period last year.
In the first quarter of 2007, the net loss of Vimicro came to USD 3.8 million according to the Generally Accepted Accounting Principles. Vimicro started early from PC camera lens IC. After its fast growth in 2003-2005, the rapid development of the company slowed. The supply exceeded market demand, and the price got greatly reduced. Another product lineup of Vimicro is handset multimedia IC, mainly the polyphonic IC and application processor. Yet, the company is faced with two disadvantages in mobile phone field. First, domestic handset producers with possibly adoption of China-made IC have declining business performance, particularly in market shares. Those enterprises make unrelenting efforts for exporting markets and the prices are greatly reduced. The rising of smuggled handsets further inflicted those domestic mobile phone producers. In addition, handset processor is apt to be highly integrated. Photo shooting by single IC or the playing and recording of MP4 can be realized by single baseband. Since polyphonic IC is a sort of mixed signal, it is hard to be integrated. So far, polyphony has been replaced by MP3 ring. Vimicro is hard to survive in the market.
Business income of Actions Semiconductor Co., Ltd arrived at USD 27 million in the second quarter of 2007, lower than USD 30.3 million in the first quarter and USD 39.3 million in the same period last year. Besides, the net profits of Actions Semiconductor Co., Ltd amounted to USD 9.8 million in the second quarter of 2007, while the figure was USD 18.1 million in the same period of preceding year. Actions Semiconductor, like Vimicro, is heavily dependent on single market, but it relies upon MP3 player. Despite Actions Semiconductor takes the majority of market shares, the strong growth of MP3 player market fades away. Downstream manufacturers force upstream producers to lower product prices, and upstream producers have no choice but to yield.
As the largest IC design company in China, Solomon Systech obtained USD 254 million in 2006, down 36% compared to previous year. And the gross profit margin dropped by 30% to 23.3%. Furthermore, there was a sharp drop of 71% in net profit. The company is highly dependent on LCD display drive IC market. Mobile phone was converted from STN to TFT in 2005. But the company could not catch up with the times. 20% of the revenue came from mono-color STN-LCD; 55% from color STN-LCD drive IC. Handset TFT display takes a share of over 60% for the moment. There is a higher price and gross profit margin of TFT drive IC than STN. The shipment, revenue and profit of Solomon Systech all dropped sharply.
Chinese local IC design companies can not afford the normal operation of an 8-inch wafer fab with monthly output of 30,000 slices. There is a decreasing number of IC design companies in China, while it takes three to five years for a new IC design company from establishment to maturation. IC design companies in mainland China are all set up by overseas Chinese, who are apt for the introduction of overseas patterns and their investments are nearly from venture capital. Affected by the stagnant market, the stock value of Chinese listed IC design companies had poor performance. For instance, the stock value of Spectrum dropped by 30% of issued price shortly after it was listed. So did Vimicro and Actions Semiconductor.
So, wafer fabs have to rely upon overseas business. In reality, 80% of revenue of wafer fabs in China are from overseas clients. This means the competition with UMC and TSMC. Since Taiwan's technical blockage, technical level of wafer fabs in mainland China is at least two or three years behind Taiwan's. And such gap is hardly bridged in short term because there is a serious shortage of talents in this field. Therefore, domestic wafer fabs have to undertake business (DRAM and NVM, etc.) that UMC and TSMC unwillingly carry.
However, China advances triumphantly in filed of wafer foundry. Investors range from enterprises to governments. Chengdu, Wuhan and Xi'an governments have invested huge capital into wafer foundry. How will those invested wafer fabs develop in 2008, let's wait and see.
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Wafer foundry industry is closely relevant to prosper of IC design industry. In 2005H2-2006H1, IC design industry enjoyed a period of fast growth, but crisis turned up then. Presently, wafer fabs have a faster production speed than the sales, which led to the increasing inventories. Semiconductor suppliers march towards their sales goals. Yet, the originally predicted growth rates of PC, handset and semiconductor were lowered because of economic uncertainty.
In Jan-Sep, 2006, inventories in supply chain kept a fast consecutive growth. Since chip producers wish to reduce production for effective control on inventories, capacity utilization ratio of Fabs dropped. Afterwards, inventories in supply chain declined. With the situation of American market, they increased production capacities again, which resulted in an increase in inventories. In March of 2007, the inventories in industry chain increased to the highest level since the year 2001. There is a steady growth of handset related chip inventories. Inventories in analog field are at normal level. Most manufacturers obtain increasing orders particularly for high-performance analog parts.
The semiconductor industry in mainland China also declined.
In the first half of 2007, the total output of IC chips in mainland China arrived at 19.274 billion units or so, up 15.2% from a year earlier. The sales income of IC industry amounted to RMB 60.72 billion, with an annual growth rate of 33.2%. But the figure sharply dropped compared to the high growth rate of 48% in the first half of 2006. As far as IC industry chain is concerned, the sales income of IC design industry in mainland China got to RMB 9.532 billion, with an annual growth rate of 22.8%, far behind the high growth rate of 50.8% in the first half of 2006. This is mainly affected by the saturation trend and price falling of terminal (MP3 and digital camera, etc.) markets. The performance of such representative IC design companies as Vimicro, Actions Semiconductor Co., Ltd., and Solomon Systech can reflect the development of China IC design industry.
In 2006, the net revenue of Vimicro amounted to USD 126.6 million, while the figure in 2005 was USD 95.3 million. Abide by the Generally Accepted Accounting Principles, the net profit of Vimicro in 2006 reached USD 9.7 million, while the figure in 2005 was USD 16.4 million. In the first quarter of 2007, the net income of Vimicro was up to USD 16.9 million, and the figure got to USD 26.4 million in the same period last year.
In the first quarter of 2007, the net loss of Vimicro came to USD 3.8 million according to the Generally Accepted Accounting Principles. Vimicro started early from PC camera lens IC. After its fast growth in 2003-2005, the rapid development of the company slowed. The supply exceeded market demand, and the price got greatly reduced. Another product lineup of Vimicro is handset multimedia IC, mainly the polyphonic IC and application processor. Yet, the company is faced with two disadvantages in mobile phone field. First, domestic handset producers with possibly adoption of China-made IC have declining business performance, particularly in market shares. Those enterprises make unrelenting efforts for exporting markets and the prices are greatly reduced. The rising of smuggled handsets further inflicted those domestic mobile phone producers. In addition, handset processor is apt to be highly integrated. Photo shooting by single IC or the playing and recording of MP4 can be realized by single baseband. Since polyphonic IC is a sort of mixed signal, it is hard to be integrated. So far, polyphony has been replaced by MP3 ring. Vimicro is hard to survive in the market.
Business income of Actions Semiconductor Co., Ltd arrived at USD 27 million in the second quarter of 2007, lower than USD 30.3 million in the first quarter and USD 39.3 million in the same period last year. Besides, the net profits of Actions Semiconductor Co., Ltd amounted to USD 9.8 million in the second quarter of 2007, while the figure was USD 18.1 million in the same period of preceding year. Actions Semiconductor, like Vimicro, is heavily dependent on single market, but it relies upon MP3 player. Despite Actions Semiconductor takes the majority of market shares, the strong growth of MP3 player market fades away. Downstream manufacturers force upstream producers to lower product prices, and upstream producers have no choice but to yield.
As the largest IC design company in China, Solomon Systech obtained USD 254 million in 2006, down 36% compared to previous year. And the gross profit margin dropped by 30% to 23.3%. Furthermore, there was a sharp drop of 71% in net profit. The company is highly dependent on LCD display drive IC market. Mobile phone was converted from STN to TFT in 2005. But the company could not catch up with the times. 20% of the revenue came from mono-color STN-LCD; 55% from color STN-LCD drive IC. Handset TFT display takes a share of over 60% for the moment. There is a higher price and gross profit margin of TFT drive IC than STN. The shipment, revenue and profit of Solomon Systech all dropped sharply.
Chinese local IC design companies can not afford the normal operation of an 8-inch wafer fab with monthly output of 30,000 slices. There is a decreasing number of IC design companies in China, while it takes three to five years for a new IC design company from establishment to maturation. IC design companies in mainland China are all set up by overseas Chinese, who are apt for the introduction of overseas patterns and their investments are nearly from venture capital. Affected by the stagnant market, the stock value of Chinese listed IC design companies had poor performance. For instance, the stock value of Spectrum dropped by 30% of issued price shortly after it was listed. So did Vimicro and Actions Semiconductor.
So, wafer fabs have to rely upon overseas business. In reality, 80% of revenue of wafer fabs in China are from overseas clients. This means the competition with UMC and TSMC. Since Taiwan's technical blockage, technical level of wafer fabs in mainland China is at least two or three years behind Taiwan's. And such gap is hardly bridged in short term because there is a serious shortage of talents in this field. Therefore, domestic wafer fabs have to undertake business (DRAM and NVM, etc.) that UMC and TSMC unwillingly carry.
However, China advances triumphantly in filed of wafer foundry. Investors range from enterprises to governments. Chengdu, Wuhan and Xi'an governments have invested huge capital into wafer foundry. How will those invested wafer fabs develop in 2008, let's wait and see.
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2005-2006 www.researchinchina.com All Rights Reserved |
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1 Brief Introduction to Wafer Foundry 1.1 Work Flow of Wafer Fabrication 1.2 Cost of Wafer Fabrication2 Global Semiconductor Manufacturing Industry 2.1 Overview of Global Semiconductor Industry 2.2 Overview of Global Wafer Foundry Industry 3 China Semiconductor Industry and Market 3.1 China Semiconductor Market 3.2 China Semiconductor Industry 3.3 China IC Design Industry 3.4 Development Trend of China Semiconductor Industry 4 Wafer Foundries 4.1 SMIC 4.2 Shanghai Hua Hong NEC Electronics Co., Ltd 4.3 Grace Semiconductor Manufacturing Corporation 4.4 Advanced Semiconductor Manufacturing Corp. Ltd 4.5 HeJian Technology (Suzhou) Co., Ltd 4.6 BCD Semiconductor Manufacturing Limited 4.7 Founder Microelectronics Co., Ltd 4.8 ACSMC 4.9 Wuxi China Resources Microelectronics (Holdings) Limited 4.9.1 CSMC Technologies Corporation 4.9.2 CR Semiconductor Wafers & Chips Co., Ltd 4.10 TSMC 4.11 UMC 4.12 Chartered Semiconductor Manufacturing Ltd 4.13 DongbuAnam 4.14 Vanguard International Semiconductor Corp 4.15 MagnaChip 4.16 Silterra 4.17 X-Fab 4.17.1 1stSilicon 4.18 Tower Semiconductor
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2005-2008 www.researchinchina.com All Rights Reserved |
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Virgin Wafer Processing Flow Flow Chart of Wafer Embedded Circuit Cost Structure of 8-inch Wafer Ranking of World's Top 50 Semiconductor Companies, 2006 Client Structure of Wafer Foundries, 1997-2006 Income Structure and Proportion of Manufacturing Process of Wafer Foundries, 2006 Revenue and Growth Rate of IC Design Companies Worldwide, 1996-2006 Forecast of Revenue of Wafer Foundries Worldwide, 2006-2011 Demand & Supply in Chinese IC Market, 2006-2010 Statistics on China's IC Import & Export Capital, 2001-2006 Statistical Income of SMIC, 2002-2006 Growth Roadmap of SMIC Quality Standards Passed by SMIC Product Downstream Application Structure of SMIC, 2006Q1-2007Q2 Product Structure of SMIC, 2006Q1-2007Q2 Client Types of SMIC, 2006Q1-2007Q2 Revenue of SMIC by Region, 2006Q1-2007Q2 Technologies of SMIC Technical Roadmap of Shanghai Huahong-NEC MLM Manufacturing Techniques Development History of ASMC Product Downstream Application Structure of ASMC, 2007Q1 Revenue of ASMC by Region, 2007Q1 Quarterly Revenue and Gross Profit Margin of ASMC, 2005Q1-2007Q1 Product Classification of BCD Product Series I of BCD Product Series II of BCD Product Series III of BCD Product Series IV of BCD Wafer Foundry Flow of ACSMC Organizational Structure of CSMC Technologies Corporation Revenue and Net Profit of CSMC Technologies Corporation, 2002-2006 Revenue of CSMC Technologies Corporation by Region, 2002-2006 Product Income Structure of CSMC Technologies Corporation, 2002-2006 Technical Roadmap of CSMC Technologies Corporation Standard OEM Flow of CR Semiconductor Wafers & Chips Co., Ltd Technical Roadmap of CR Semiconductor Wafers & Chips Co., Ltd Statistical Revenue of TSMC, 2003-2006 Statistics on Total Staff of TSMC, 2003-2006 Structure of Technologies of TSMC, 2005Q3-2007Q2 Structure of Product Applications of TSMC, 2005Q3-2007Q2 Income Structure of TSMC by Region, 2005Q3-2007Q2 Client Structure of TSMC, 2005Q3-2007Q2 Roadmap for Product Technologies of TSMC Service Roadmap of TSMC Educational Background of TSMC Employees Revenue and Gross Profit Margin of UMC, 2000-2006 Changes in Production Capacity of UMC, 2000-2007 Educational Background of UMC Staff, 2004-2006 Revenue of UMC by Region, 2007Q2 Revenue of UMC by Client, 2007Q2 Income Structure of Product Applications of UMC, 2007Q2 Revenue of UMC by Techniques, 2007Q2 Technical Roadmap of UMC Revenue and Net Profit of CSM, 1998-2006 Statistics and Forecast of Quarterly Revenue of CSM, 2006Q3-2007Q3 Cooperation Events between IBM and CSM, 2004Q1-2007Q3 Cooperative Partners of CSM Technical Roadmap of CSM for Products with Special Techniques Downstream Product Application Structure of CSM, 2006Q2-2007Q2 Revenue of CSM by Region, 2006Q2-2007Q2 Statistical Production Capacity of CSM, 2003-2006 Technique Roadmap of DongbuAnam Technical Roadmap of Vanguard International Semiconductor Corp Revenue and Gross Profit Margin of MagnaChip, 2002-2006 Income Structure of MagnaChip, 2004-2006 Revenue of MagnaChip by Region, 2006 Logic and Mixed Signal Technology Roadmap of Silterra Technical Roadmap for High-voltage Techniques of Silterra Technical Roadmap of X-FAB MEMS Technology Roadmap of X-FAB Logic and Mixed Signal Technology Roadmap of 1stSilicon Special Techniques Roadmap of 1stSilicon Technical Road Map of Tower Semiconductor microFLASH Technology Roadmap of Tower Semiconductor Top 10 IC Design Companies Worldwide, 2007Q1 World's Top 10 Wafer Foundries, 2006 Wafer Fabs with Production of 6-inch or above Wafer in Mainland China Top 8 IC Manufacturers in Mainland China, 2006 Ranking of Top 10 IC Design Companies in China, 2006 Ranking of Top 20 IC Design Companies in Taiwan, 2006 Wafer Fabs of SMIC EDR of 0.25-micron Parts EDR of 0.15-micron Parts Production Capacity of BCD Quoted Price of Wafer Foundry of ACSMC Product Types of CSMC Technologies Corporation Wafer Fabs of TSMC Staff Composition of TSMC by Occupation Features of 45-nm Techniques of TSMC Features of Mixed-signal/RF Techniques of TSMC Features of (SiGe) BiCMOS Techniques of TSMC Features of High-voltage Techniques of TSMC Production Capacity of Wafer Fabs of UMC, 2007Q2 Main Companies Invested by UMC Staff Composition of UMC, 2004-2006 Features of Mixed-signal/RFCMOS Techniques of UMC Features of CMOS Image Sensor Techniques of UMC Features of High-voltage Techniques of UMC Statistical Production Capacity of Each Wafer Fab of CSM, 2006Q2-2007Q2 Technique Structure of CSM, 2006Q2-2007Q2 Features of 130-nm Techniques of DongbuAnam Features of CMOS Image Sensor IC Techniques of DongbuAnam Features of High-voltage Techniques of DongbuAnam Features of Logic Circuit Manufacturing Process of VSIC Features of Mixed Circuit Manufacturing Process of VSIC Features of High-voltage Manufacturing Process of VSIC Wafer Fabs of MagnaChip Technique Features of 1stSilicon
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2005-2008 www.researchinchina.com All Rights Reserved
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