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China's weak economy hurts outlook for its IC market

Posted: 13 Mar 2014     Print Version  Bookmark and Share

Keywords:China  semiconductor  market 

China's semiconductor market appears to have hit a plateau and not even the Chinese government's Rs.30,864.20 crore investment plan to bolster chip revenues is going to reverse its bleak outlook, according to a report published by The Information Network.

TIN President Robert Castellano said, "For 2014, [semiconductor] production will decrease to less than 10 per cent year-on-year as a result of weakness on the Chinese economy."

SMIC is one of the first companies that have been hit by this downturn. The semiconductor foundry recorded its revenues including wafer shipments from Wuhan Xinxin at Rs.3,035.80 crore in 4Q13—a 7.9 per cent quarter-over-quarter drop.

Slow chip production will directly affect the semiconductor equipment market. At the same time, the backlash from US restrictions placed on Chinese solar products will further contribute to the cutback in semiconductor equipment revenues abroad.

Worldwide fab building made for a growth in the number of fabs for LED production in China. The global market for LEDs is found to have slowed dramatically in 2013. While China's IC capacity jumped two per cent during the same year, the LED market slowdown will minimise any expansion on IC capacity for LEDs this year.

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