China continues to dominate Asia/Pac semi industry growth, but India, Vietnam gaining
As Gartner lowers its forecast for Asia/Pacific semiconductor growth, it notes the China/Hong Kong market is expected to continue to experience sustained lower growth, as compared to emerging markets like India and Vietnam.
By Suzanne Deffree, Managing Editor, News -- EDN, October 6, 2008
The worsening global macroeconomic environment, further eroded consumer confidence, and cloudy visibility in the second half of the year have forced Gartner Inc to lower its forecast for 2008 revenue growth in Asia/Pacific's semiconductor market.
The research company in its Semiconductor DQ Monday Report this morning decreased its estimate for the region from 6.4% to 5.2% growth on an annual basis.
"In the coming months, we expect to see signs of a widespread slowdown in the electronics sector, which in turn will have a direct negative impact on semiconductor sales," Philip Koh and Chang-Soo Kim, Gartner analysts, wrote in the weekly report. "Total semiconductor revenue in the region reached $149.3 billion in 2007, and we expect this total to increase to $157.1 billion in 2008."
Studying a period from 2007 through 2012, the two analysts said that the China/Hong Kong market is expected to continue to experience sustained lower growth, as compared to emerging markets like India and Vietnam (which Gartner reports on as part of its "Other Asia/Pacific" category).
Specifically Gartner's data projects the CAGR (compound annual growth rate) of the China/Hong Kong semiconductor market from 2007 through 2012 will be 7.1%. China/Hong Kong will continue to dominate the semiconductor industry in the Asia/Pacific, accounting for around 61.1% of the total semiconductor market in 2008, the research company said.
Meanwhile, Gartner said it expects that India and the Other Asia/Pacific category are forecast to achieve higher CAGRs of 19.1% and 18.7%, respectively. (See Table 1 below.)
"India is expected to continue to attract investment from global electronic manufacturers, which will drive significant revenue growth in semiconductor consumption. As electronic equipment manufacturing continues to shift out to lower-cost destinations to stay competitive, major markets like South Korea, Taiwan, and Singapore are forecast to see continued falls in their semiconductor consumption revenue," the analysts wrote in the report.
"The growth in the Other Asia/Pacific category is being driven primarily by emerging markets, such as Vietnam," Koh and Kim continued. "This country has become increasingly attractive to global electronic equipment manufacturers and semiconductor vendors, and looks likely to emerge as the next major market in the region's electronics industry."
Reporting on mid-term estimates, Gartner said it expects Asia/Pacific semiconductor revenue will grow by 8.4% in 2010, ahead of a cyclical downturn in 2011, when growth will drop to a 2.5%, before returning to growth of 7.2% in 2012. A CAGR of 6.3% is forecast for Asia/Pacific from 2007 through 2012, the research company reported.
Table 1: Major country-level semiconductor forecast, Asia/Pacific, 2007-2012 (billions of dollars)
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | CAGR (%)2007-2012 | |
| China/Hong Kong | 89 | 96 | 105.1 | 114.4 | 117.5 | 125.2 | 7.1 |
| India | 4 | 5 | 6.2 | 7.4 | 8.2 | 9.5 | 19.1 |
| South Korea | 19 | 17.4 | 16.7 | 16.8 | 16 | 16.1 | -3.2 |
| Malaysia | 9.9 | 10 | 10.6 | 11.2 | 11.3 | 12.1 | 4.1 |
| Singapore | 3.7 | 3.3 | 3.1 | 2.9 | 2.7 | 2.5 | -7.7 |
| Taiwan | 11.6 | 10.8 | 10.4 | 9.9 | 8.9 | 8.6 | -5.9 |
| Other Asia/Pacific | 12.2 | 14.6 | 18.1 | 21.7 | 24.6 | 28.7 | 18.7 |
| Total Asia/Pacific | 149.3 | 157.1 | 170.1 | 184.3 | 189 | 202.7 | 6.3 |
Source: Gartner, October 2008
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That's retarded. Because you don't have the infrasture you shouldn't get into the semi business? Maybe you should stick to the bullock cart business then.
Why doesn't a big country like India have world class infrasture in special economic zones? You have to spend money to make money.
neel - 2008-7-10 08:13:00 PDT -
In reply to Dr Gupta's comment:
Sir, how can you say we have strength only in software? I think we have many strengths and it only needs to be exploited positively. Our Agriculture, Textile is also at the highest levels. We should not only concentrate on software but also on above two other industries which are indigenous, does not require HEAVY CAPITAL (why send dollars to big companies outside) and we can export these also. I do agree with Dr. Gupta that it is not a good investment to go for semiconductor and other electronics component business in India. It is sending money outside for factories and tools + we do not have good solid infrastructure required for fragile operartions.
Amit Dogra - 2008-6-10 12:49:00 PDT -
Semi growth in Asia is a hype more like DOT.COM and will burst sooner than one expects. It is foolish to realize that India wil have same amount of cell phones like China or Europe although its population is 2nd to China. Difference is there is a middle class who is not heavily populated and sonservative with money and very level headed when it comes to extravaganza. Electronics will not blossom in ASIA as it has in Europe and Americas. You can look at the Asian electrnics markets except Japan and South Korea and see the class of equipment and it's look which tells you there is a market for cheap replicas which is 1/100th of the price of actual product. Semi equipment and cost of running a Semi factory as per Semi specs will never fly in India and Vietnam either. The atmospehre and infrastructure is just not there. India will prosper but no serious electronic component business will thrive for long. Software is main stream and that is where we need to concentrate.
Corporate greed will take our money and spend is unwisely. Lets make sure we put our money where our brain and strength is to make most of it. Electronics component business should be left alone.
Bhagat Das Gupta Ph.D - 2008-6-10 12:41:00 PDT
