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A new outlook on Asia Semi Design Industry
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Tuesday, March 18, 2003
When it comes to market predictions about the electronics industry across Asia and Japan, the only thing fuzzy is how far up the line goes and how steep the slope really is.
China still provides the biggest opportunity in the short-term, but the overall electronics market is robust in India and Singapore and is expected to rebound in Japan over the next few years as new end-user technologies drive demand for components.
In real terms, the market for EDA in Asia, excluding Japan, represented only $276 million of the total $4 billion worldwide EDA market in 2001. But that market is expected to grow at a 30 percent clip every year for the next five years, according to Kirtima Varma, editor of EDN Asia.
Varma said that growth would be split across Asia, with a huge uptick in India, which has been a software powerhouse for several years. Varma said India is the center of the fastest design services growth in the world. “Design services will be the next IP segment to emerge from India,” he said.
In design services, China still trails Taiwan, which has been the center of the foundry business in Asia until recently. But Varma said that within the next couple of years China would be offering similar levels of services. He added that Korea, which has been focused on designing memory components, and Singapore, which has been focused heavily on the radio frequency market, also are shifting its emphasis to compete with other geographies.
Japan, meanwhile, continues to chug along even though growth is down. At $4.5 trillion annually, Japan remains the second-largest economy behind the United States. But Kenji Tsuda, editorial director of EDN Japan, says that will change as demand starts increasing for a variety of new electronics gear, including EL displays and LCD and plasma televisions.
“Over the next two to three years, the consumer market will increase again,” Tsuda said. He noted that Japan’s electronics industry as a whole will grow 3.6 percent this year, while the components market will grow 5.1 percent and the digital consumer market will grow 3.8 percent.
In China, which has been the centerpiece for media attention in Asia, growth continues unabated. China is now the second-largest PC market, recording 10 million units sold and many including advanced features, such as built-in wireless connectivity, according to William Zhang, editorial director of EDN China. He said the country also currently has 200 million mobile phone subscribers, and relies heavily on the wireless infrastructure to post short messages.
He said that so many messages are being posted that at times the entire system gets overloaded.
In China, the competition has become particularly intense because the market is new and the potential opportunity is huge. There currently are 400 IC design houses and 36 separate mobile phone manufacturers. One company even started making diamond-encrusted phones to stand out from the pack.
Zhang noted that while the average IC design engineer currently earns $10,000 in China, good ones are in extremely short supply at the moment. He said that should ease in the near future because this year alone 100,000 students will graduate with degrees in computer, telecommunications or electronics engineering.
Zhang also noted that last year, China had 60 million Internet users. Of those, however, about 80 percent are under the age of 32 and the vast majority do not own credit cards.
By: DocMemory
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