Current Prospects Of China's Integrated Circuit Board

       According to reports: Affected by factors such as the decline in demand in the European and American markets and the weak global economic recovery, the market growth rate of China's integrated circuit board PCB industry has dropped significantly since 2011. At the "SEMICON China, SOLARCON China and FPD China 2012" conference held in Shanghai a few days ago, experts said that the integrated circuit market began to pick up partly in the first quarter of this year, and the industry is expected to gradually recover in the second quarter. At the same time, the industry generally expects that the implementation details of the "No. 4 Document" that the state supports the development of the integrated circuit industry can be issued as soon as possible, so as to provide enterprises with a better industrial environment and policy support.

       The growth rate of China's integrated circuit market is slowing down, but the industrial prospect is still good. 

 according to the latest statistics of China Semiconductor Industry Association, the global semiconductor market scale increased by 0.4% in 2011, with about 299.5 billion US dollars. Among them, the scale of China's IC market in 2011 was 806.56 billion yuan, with a year-on-year increase of 9.7%, which was far less than that of 29.5% in 2010.

       In 2011, China's IC design industry maintained a rapid growth, with annual sales revenue of 47.37 billion yuan, a year-on-year increase of 30.2%; but at the same time, the growth rate of IC manufacturing industry dropped significantly, and the sealing and testing industry showed negative growth. Affected by the downturn in the international market and the earthquake in Japan, overseas orders of enterprises have been greatly reduced. The growth rate of chip manufacturing industry is 8.9%, which is 22% lower than that in 2010, with a scale of 48.69 billion yuan. The sales revenue of sealing and testing industry decreased year on year2.8%, with a scale of 61.16 billion yuan.

     Although the growth of China's integrated circuit market slowed down in 2011, in the view of experts, the global semiconductor market in 2012 is expected to step out of the haze of weak market demand. Driven by the growth of domestic demand market and the strategic emerging industries such as new generation information technology, energy conservation and environmental protection, China's IC market will continue to become the most dynamic and promising regional market in the world, thus driving the rapid development of China's IC industry.

      Dennis P. mcguirk, global president and CEO of semi, believes that "the prospect of IC industry in the next two years will be very good. With the strong support of the government, the IC industry has become a key development field in China, and China will become a strong member of the IC world in the future".

       According to CCID, the growth rate of China's IC market will remain around 9% in the next few years, and the main driving force will come from PC, mobile phone, LCD TV and other electronic products with large output. In addition, emerging applications will become one of the driving factors for the growth of the market. The development of the Internet of things, cloud computing, new energy,semiconductor lighting, medical electronics and security electronics will bring new impetus to China's integrated circuit market.

       The market recovered in the first quarter and is expected to rebound in the second quarter.

      Due to the decline in end customer demand for integrated circuits, the global industry inventory surplus intensified in the fourth quarter of 2011. Many integrated circuit companies increased their inventory days in the fourth quarter compared with the third quarter, while their operating revenue declined quarter-on-quarter. As a result, some semiconductor companies began cutting excess inventories further in the fourth quarter, while many adjusted their capacity utilization rates in response to falling orders. Orders from IC manufacturers have started to improve this year as end-customer inventories continue to fall.

       “I am very glad that the semiconductor industry has gone through the haze of 2011. Last year affected by global natural disasters, the related industrial chain of semiconductor industry has suffered a lot. From the first quarter of 2012, the semiconductor industry as a whole is getting warmer. We hope that the semiconductor market will usher in spring in the second quarter. " According to Qiu Ciyun, CEO of SMIC.

       As the largest semiconductor foundry in Chinese mainland, SMIC recently released its fourth quarter earnings report in 2011, showing that the total sales volume of the fourth quarter was $289 million 600 thousand, a decrease of 29.1% compared with the same period last year, and a net loss of 165 million 600 thousand US dollars. According to the prediction of China core international, with the enhancement of customer confidence and the recovery of economic environment, the company's revenue is expected to increase by 7% to 9% in the first quarter of 2012.

      Emiconductor contract manufacturer Shanghai Advanced Semiconductor (03355.HK) President Wang Qingyu recently also said that last year due to the impact of external factors, customers more prudent in the purchase of goods, resulting in the company's net profit fell. But orders started to pick up in the second quarter of this year, and while some customers remained cautious, they already had strong cash flows to place orders.

      Zhou Liqian, an analyst at Everbright Securities, recently released a report that the prosperity of the integrated circuit industry in the first quarter of this year has begun to recover, but it is still in the bottom area. Many growth companies concerned by the market will face the test of the first quarter report.

      Supporting the new policies have been promulgated successively, and the implementation rules need to be implemented urgently

      In order to promote the development of integrated circuit industry, on January 28, 2011, the notice of the State Council on printing and Distributing Several Policies to further encourage the development of software industry and integrated circuit industry (hereinafter referred to as "No.4 document") was officially issued, which clearly pointed out that policy support would be given to the industry from the aspects of Finance and taxation, investment and financing, import and export. 

      In late February this year, the Ministry of Industry and Information Technology issued the Development Plan for the Integrated Circuit Industry during the 12th Five-Year Plan Period, which aims to more than double the scale of the domestic integrated circuit industry by the end of the 12th Five-year Plan period, with output exceeding 150 billion pieces and sales revenue reaching 330 billion yuan. The introduction of this plan is considered to be of great guiding significance for promoting the development of China's IC industry and promoting its comprehensive, coordinated and rapid development.

     Gu Wenjun, senior analyst of iSuppli's China semiconductor industry, told reporters that there is still a gap between the planning content and the current demand of integrated circuit manufacturers. Enterprises need some more targeted and operational support policies, such as preferential tax policies and other policies that are more in line with the law of industrial development. At the same time, it is better to introduce some policies to encourage M & A, integration and integration Strengthen the specific policy of international M & A. "In addition, it has been a year since the No. 4 document was issued, but the specific implementation rules have not yet come out. In this regard, we hope to speed up the pace.". 

     In an interview with reporters, Wang Xiaolong, a researcher at Tuolong Industrial Research Institute, also believed that compared with the "12th Five Year Plan" of the IC industry, domestic IC manufacturers may pay more attention to some substantive preferential policies formulated by the State Administration of Taxation and the General Administration of customs. In addition, some specific supporting policies issued by the local government, usually combined with the actual situation of the "12th Five Year Plan" and local financial resources, are also the focus of attention of IC enterprises in various regions. 

    Jiang Shoulei, secretary general of the Shanghai Integrated Circuit Industry Association, pointed out to reporters that a major problem facing the development of the domestic integrated circuit industry is insufficient investment. Compared with the huge investment of some foreign integrated circuit board manufacturers, the investment scale of domestic enterprises is relatively small, which restricts Companies cannot keep up with the speed. In this regard, it is urgent to get more support and improvement.

    Ding Wenwu, Director of the Electronic Information Department of the Ministry of Industry and Information Technology, recently stated publicly that one of the key tasks of the integrated circuit board PCB industry in 2012 is to do a good job in the promulgation of the implementation rules of Document 4, "to promote the development of the integrated circuit industry in Document 4 Implementation rules such as the corporate income tax, the business tax of integrated circuit design enterprises, and the key integrated circuit design enterprise identification measures in the national planning layout will be promulgated as soon as possible, and the preferential corporate income tax policies related to packaging and testing, integrated circuit special equipment, and key materials will be studied ”.