“the chinese dragon’s electronic components market … · “the chinese dragon’s electronic...

China Outlook Consulting Inc [email protected]

“The Chinese Dragon’s Electronic Components Market Drives Growth…”

Amy Wang

Vice President, China Outlook Consulting


Agenda

• China Electronics Industry Slow Down• Domestic Market: Key to Drive the Economy• Market Demand for Semiconductors and

Components• TAM and DTAM in China• Distribution Trends in China• Your Opportunities


The Slow-Down of China Electronics Sales

10%

13%

18%

24%24.80%

0%

5%

10%

15%

20%

25%

30%

2005 2006 2007 2008 *2009

China shipped US$ 753.7 billion electronics products in 2008 (not including US$111.4bn software revenue), up 13% YOY. From Jan to Aug 2009, China managed US$436 billion sales revenue.


Heavily Suffered China’s Export Business

10%

13.6%

23.6%

35.8%

29.20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2005 2006 2007 2008 *2009

In 2008, China exported US$521.8 billion electronics products (including components), up 13.6% YOY. Export growth declined apparently influenced by reduced overseas demand. From Jan to Aug 2009, US$267 billion export revenue.


Major Product Shipments in 2008

49%25.09LCD TV9.3%81.9Digital Camera6.5%90.3TV set25.2%108.6Notebook Computer

-17.5%28.1Desk-top PC

-7.2%14.92Mobile Base Station Equipment

-14.9%45.8Central Office Exchange2%559.6HandsetYOY Growth (%)Shipment (Million Units)End Markets

From Jan to August 2009, handset shipment -5.4% YOY; digital camera: 3.9%; notebook computer 42.3%; LCD TV: 123.2%; mobile base station equipment: 126% YOY


China Electronics Sales: Export VS Domestic Sales

65% 62% 66% 65% 69.20% 64%

35% 38% 34% 35% 31% 36.0%

0%

10%20%

30%

40%50%

60%

70%

80%90%

100%

2004 2005 2006 2007 2008 2009*

Export Domestic Sales


Domestic Market: Key to Drive the Market

• Government investment on infrastructures (US$1617bn till 2011)

• Policies give opportunities to technologies • Home appliance to village program• Telecom operators’ restructuring • 3G opportunities and Challenges• Demand trend of emerging markets


China’s Electronics Component Market

Semiconductor57%

Passive&IPE43%

2008 market demand: grow 13% to US$190.5 bn.


China’s TAM by Shipment in 2008:US$190.5 billion

• China’s market demand for semiconductors was US$108.3bn in 2008, 92% needs to be imported.

• China’s market demand for non-semiconductor components was US$82.2 billion in 2008, of which 56% was imported


China’s DTAM: US$18.3 Billion

•Distribution in transfer business by international distributors:35%

•Distribution in Local orders conducted by international distributors:10%

•Distribution in local orders conducted by Chinese distributors:55%


Major Franchise Distributors in China:46.8% of DTAM

• Top 25 Local Chinese franchise distributors managed US$2.45 billion sales revenue

• Top 10 international and regional distributors managed US$6.12 billion sales revenue

• Tier 1 revenue range: US$100-300 million• Tier 2 revenue range: US$50million-99 million• Tier 3 revenue range: US$10milion to $49 million• Hundreds small ones: below US$ 10million

Source: 2008 China Franchised Distribution Report


Distribution Service Trends

• Reduced stock time to manage supply chain risk: from 6 weeks to 4 weeks; receivable time remains 6 weeks to increase to 8 weeks

• Remove line cards to focus on more profitable businesses; add more lines in IP&E and local suppliers

• Open branches in tier-two cities to catch local business.

• Chinese distributor move to get public listed encouraged by Chinese government

• Catalogue distributors have stable business growth in 2008 because of increased market demand from R&D activities in China from OEM or research institutes.

• Design solutions demand moving to deeper level


Successful Distributors in China

• Fast reaction to market demand• Follow government initiatives and regulations• Work closely with suppliers to promote branding and

service • Work for margin not for revenue• Technical solutions to customers• Explore emerging markets (automotive electronics,

medical electronics, industrial control and automation, and instrumentations)


New Findings of Distribution Tech Services

• Circuit solutions on increased demands: circuit protection, EMC, filtering and motor control etc

• Reasons: new energy and environmental protection regulations; industry applications have more reliability on circuit than consumer applications

• Niche international technology companies have more opportunities as market become more specific segmented

• COC has successful case of helping a US EMC solution company to seek Chinese distributions


New Opportunity: West China

12.7

7.8 7.7

3.6

1.4 0.90.2

36%29%

23%16%

60%

19% 21%

0123456789

10111213

Sichuan Chengdou Hubei Shanxi Chongqing Guizhou Yunnan

0%

10%

20%

30%

40%

50%

60%

70%

Sales revenue (unit: B$) Growth %


9 major industries in West China

• Communications Equipment• Broadcasting Equipment• Digital A/V Products• Industry Electronics• Transportation Vehicles (Railway, Automotive,

Airplane, Aerospace, Ship building—RAAAS）• Medical Electronics• PC and Software• Aerospace/military Electronics• Electronics Components and Materials


China Outlook Consulting Inc.

• Headquarter: Calgary, Canada• Established: 2003 Spring• Major customer groups: International semiconductor

and component suppliers, distributors and OEM/ODM companies, local distribution companies and electronics show owner

• Major products: tailor research projects, newsletter, standard research reports, and conference


Research Resources

• Partnership and being consultant with major tradeshow owners and associations, and engineering website to deliver conferences and access research resources

• Research database: Major Chinese and international semiconductor and component suppliers and distributors, purchasing executives and engineers from OEM/EMS

• Co-organize 2009 China Market Leading Electronics Component Manufacturer Awards and Summit


Major Customer Service

• Monthly market intelligent report: China e-Outlook• Annual market review and forecast: 2009 China

Electronics Outlook• Annual Distribution Research• Service to find Quality Chinese Distributors • Service to find Quality Chinese Suppliers • Customized Research Service (specific market research,

competitive studies, media research…)


Conference Development

• China Electronics Distribution Forum, 2005-2008• China EMS Summit, 2005• Global Semiconductor Analysis Conference, 2006-2007• China Electronics Component Market Summit, 2008• China Purchasing Preference and Supply Trend, April

2009• West China Electronics Forum, August 2009• Technical seminars: circuit protection/EMC solutions;

power component and devices apps, Nov 2009• 2009 China Market Leading Electronics Component

Manufacturer Awards and Summit, Nov.2009• And more……


Conclusion

• Export market is still important to China, but domestic market becomes growth engine

• New policies drive non-consumer demands to have more robust/reliable circuits, which China needs international tech companies to support

• COC has a network and resource in China to provide updated market intelligence and focused research

• Contact us at [email protected]


Thank You !

“the chinese dragon’s electronic components market … · “the chinese dragon’s electronic...

Documents