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Integrated circuit market passes the worst

THE hardest period for the domestic integrated circuit industry has passed and the market revenue will continue to grow this year, though the global IC market is expected to decrease 10 percent in 2009, industry officials said during a semiconductor forum today.

The 4-trillion-yuan (US$586 billion) economy stimulus policy, the 3G market and the encouragement of home appliances in the rural areas are helping boost the chip market, speakers said during a forum of Semicon China 2009 which opened today in Shanghai.

China's domestic integrated circuit industry revenue will continue to grow about 3 percent in 2009, though with a lower growth rate as a result of the global financial crisis, said Richard Chang, chief executive of Semiconductor Manufacture International Corp.

Globally speaking, semiconductor market revenue will drop about 10 percent in 2009, according to iSuppli Corp, a US-based IT consulting firm.

"The toughest time was in December when our plant utilization rate dropped 15 percentage points (from 90 percent to 75 percent). Now the orders are increasing every month up to March," Chang said.

The semiconductor industry faces massive layoff worldwide but the situation in China is much better because of the "impressive government stimulus packages," said Howard Ko, generation manager of Silicon Engineering Group of Synopsys Inc.

SMIC's most recent orders relate to the "home appliances for rural areas" program. In the program, government has subsidized selected products sold to rural areas, according to SMIC, the biggest made-to-order chip maker in the Chinese mainland.

The government has also invested heavily to support high-tech sectors, including semiconductors, flat panel displays and next-generation mobile communications, according to Xiao Hua, a senior official at the Ministry of Industry and Information Technology.

SMIC will start manufacture using 45-nanometer technology in the second half, one or two generations ahead of the domestic technology level, Chang said.
Major semiconductor firms, including SMIC and Applied Materials, attended the forum, which will close on Thursday.


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