China Market Watch 112204

Volume 3, Issue 22 Market Watch – China

11.22.04 LCD Monitor Output to Exceed That of CRT

Flat is in; CRT to eventually fall by the wayside

B Y K EVIN W ANG

China will produce an estimated 44.637 million desktop PC LCD monitors in 2004, up 42 percent from 2003,

Growth Rate (CAGR) of 10 percent. CRT displays will continue to account for most of China’s monitor market until 2006.

The nation’s LCD monitor penetration rate will increase dramatically due to the sharply falling prices of such thin monitors. Specifically, the penetration rate will rise from 19 percent in 2003 to 89 percent in 2008. Figure 2 presents iSuppli’s forecast of sales of LCD vs. CRT monitors in China from 2003 through 2008.

11.22.04 Volume 3, Issue 22

H

export shipments are for the Chinese manufacturers’ own-brand sales in the U.S. and European markets.

Moreover, big retailers such as Wal-Mart and Best Buy, among others, also are customers of China’s major monitor manufacturers. Among these companies are Proview and AOC.

In 2003, China’s LCD monitor exports registered 29.8 million units. iSuppli believes that the export market will swell to 41.5 million units in 2004, for an increase of 39 percent over a year earlier. The nation’s top-10 LCD monitor makers will account for 73 percent of China’s LCD monitor shipments in 2004.

iSuppli also forecasts that China will export 97.8 million LCD monitors in 2008, for a CAGR of 27 percent from 2004.

Figure 3 presents iSuppli’s forecast of LCDs for export and for domestic consumption.

11.22.04

Volume 3, Issue 22

? Genesis Microchip ? MStar Semiconductor

? Media Reality Technologies (MRT)? Realtek Semiconductor

Many suppliers of controller ICs have exited the market due to Intellectual Property (IP) issues and severe price erosion for these parts. This market likely will be even more concentrated in the future.

Monitor makers from Korea, Taiwan, Japan and the Netherlands have managed to encourage most of their principal suppliers to set up shop in China. This enables them to benefit from low labor costs as well as from the nation’s complete and efficient electronic supply chains.

Furthermore, they now have situated most of their design facilities in China because local engineers possess full system design capabilities. As a result, there appears to be no space for Independent Design Houses (IDHs) to survive in this booming market.

“China, already the leading manufacturing region for LCD and CRT monitors, is poised to continue its expansion into the LCD monitor market, with much of the new glass and panel manufacturing effort focused on that region,” said Rhoda Alexander, director, monitor research at iSuppli.

Kevin Wang is an industry analyst for iSuppli Corp. Contact him at kwang@https://www.wendangku.net/doc/364138705.html,

iSuppli soon will publish a topical report providing a comprehensive analysis of China’s monitor industry. The report will present a five-year market forecast for overall production and by screen size. The report also will feature in-depth research on the nation’s display electronics supply chain. This analysis will enable monitor makers and suppliers of display electronics to make better strategic decisions involving their approaches to the Chinese market.

iSuppli Market Watch – China 11.22.04

Volume 3, Issue 22

Distributors, Independent Design Houses Seek to Boost China’s WPAN Market

IDHs promote ZigBee solutions in residential control sector

B Y H ORSE L IU

So far, there has been scant demand in China for ZigBee Wireless Personal Area Network (WPAN) products. However, distributors of electronic components and Independent Design Houses (IDHs) have started promoting ZigBee solutions in the market for residential control systems.

They hope to build prospects for future business. Other target market segments for ZigBee products include those for lighting control, energy management, industrial control and Personal Computer (PC) peripherals.

ZigBee is one of the standards for WPAN products. Currently, WPAN has three main open standards: Bluetooth, Ultra Wide Band (UWB) and ZigBee, with UWB facing many developmental issues. Already, some Bluetooth products have entered the market segments of communications systems and PCs.

The ZigBee Alliance will soon announce Version 1.0 of its network standard. Figure 4 presents a comparison of key applications for complementary protocols.

Figure 4: Comparison of Key Applications for Complementary Protocols

The ZigBee protocol provides for the ability to operate for years on inexpensive primary batteries for a typical monitoring application, while also enabling broad-based deployment of reliable wireless networks having low-complexity and low-cost solutions.

Table 1 presents a comparison of key features of complementary protocols.

iSuppli Market Watch – China

11.22.04

Volume 3, Issue 22

In China, distributors and IDH s seek to offer this new technology and serve as industry promoters. They are working closely with semiconductor vendors that can provide ZigBee solutions, which now include:

? Chipcon: CC2420? Ember: EM2420

? Freescale Semiconductor: MC13190, MC13191, MC13192? ZMD: ZMD44101 ? Oki Electric: ML7065

Dynax Digital Creation Ltd., a distributor of electronic components for DVD players and LCD-TVs, is the parent company of U-Tech Electronics Co. Ltd., itself a distributor of Ember’s ICs. U-Tech Electronics aims to promote ZigBee solutions in the market for residential control systems.

Beijing H elicomm Technology Co. Ltd. (H elicomm), a design house for ZigBee applications, already provides ZigBee development tools and application software. H elicomm even has designed ZigBee know-how into some of Haier’s residential automation products.

Specifically, H elicomm expects that ZigBee technology will augment WPAN applications in China. Additionally,Helicomm developed a street-lamp control system with ZigBee technology for the Taiwanese market.

The Chinese government and domestic enterprises seek to establish an indigenous industry standard for Transmission Layers, Network Layers and Application Layers for residential automation systems, including Radio Frequency (RF) ICs. As a principal promoter, Beijing-based Lenovo is working on the Intelligent Grouping and Resource Sharing (IGRS) standard, while Haier is working on the ITopHome Standard.

Initially, China’s ZigBee products will be exported, due to weak demand in the domestic market. On the other hand, iSuppli sees some promising signs. For example, Motorola Inc. plans to build ZigBee modules into various models of mobile phones.

Horse Liu is a senior analyst with iSuppli Corp. Contact him at hliu@https://www.wendangku.net/doc/364138705.html,

Table 1: Comparison of Key Features of Complementary Protocols

Features Wi-Fi Bluetooth ZigBee Power Profile Hours Days Years Complexity Very Complex Complex Simple Nodes/Master 32

7

64000

Latency Enumeration up to 3 seconds Enumeration up to 10 seconds Enumeration 30 milliseconds Range 100 meters 10 meters 70-300 meters Extendability Roaming possible No Yes Data Rate 11Mbit/Sec.

111Mbit/Sec.250Kbit/Sec.

Security Authentication Service Set ID

64 bit, 128 bit 128 bit AES and Application Layer user defined Main Application

Internet Connection

Audio

Text Transmission and Control

Source : iSuppli Corp. | November 2004

iSuppli Market Watch – China 11.22.04

Volume 3, Issue 22

3G Wireless Market Poised to Start Up in China Next Y ear, Finally

Central government plays a supervisory role in cultivating this vital sector

B Y E VAN

C HI

Part two of a two-part series. Part one, which appeared in the Nov. 8, 2004 edition of iSuppli Market Watch—China, discussed when China’s government might begin issuing Third-Generation (3G) mobile infrastructure service licenses. Commit, a relatively new company established in February 2002, has an array of well-known investors. Among its investors are China Putian Corp., China Academy of Telecommunications Electronics, Inc., Texas Instruments (China) and Nokia (China) Investment Co. Ltd.

Commit is positioning itself as a specialty provider of TD-SCDMA terminal chipset solutions.

Commit provides five chips for its TD-SCDMA solution:

? CMT1211 tempest-Copro LCR-TDD HW Accelerator, which the company developed in house

? CMT111 tempest-Kernel Data baseband and application chip

? CMT3111 Cyclone Analog baseband and power management chip

? CMT5121 ThundeR RF Receiver

? CMT5111 ThundeT RF Transmitter, which includes cooperation from TI

Various makers of TD-SCDMA handset chips have announced that they will launch commercial TD-SCDMA handset production by the end of June 2005.

iSuppli expects China’s 3G market will start up before June 2005. The 3G licenses are likely to be issued to the major mobile-phone service providers China Mobile and China Unicom, and possibly even to the fixed-line operators China Telecom and China Netcom.

China Mobile is poised to select the W-CDMA standard and China Unicom will use the CDMA2000 technology.

The full prospects of the TD-SCDMA standard are not entirely clear, but we can see that the TD-SCDMA standard will become an important player in China’s 3G market under support from the Chinese government.

China Satellite Communication Corp. (Satcom), the smallest of the nation‘s six telecom operators, apparently plans to invest RMB80 billion (US$9.67 billion) to construct a TD-SCDMA 3G network, some industry observers say.

It is important for the 3G system providers to develop equipment for all three standards for China’s 3G telecom market. The country’s local telecom equipment makers, including ZTE Corp., are preparing for all three 3G standards.

UTStarcom, H uawei, Nortel Networks, Alcatel and others have joined China’s TD-SCDMA forum and began developing TD-SCDMA know-how. Some of them will likely succeed in the TD-SCDMA market and will jockey to gain larger shares of this market.

Part 1 of this article appeared in the Nov. 8 issue of iSuppli Market Watch—China.

Evan Chi is an industry analyst with iSuppli Corp. Contact him at evchi@https://www.wendangku.net/doc/364138705.html,

iSuppli Market Watch – China 11.22.04

Volume 3, Issue 22

Events, Reports and Services from iSuppli New Reports

November

Flash, SRAM & Specialty Memory

Flash Memory Market Share Module Preliminary—Q3 2004

Contract Manufacturers Navigate Through Gloomy Markets

EMS and ODM Market Tracker—Q3 2004

An Assessment of the Top OEMs' Semiconductor Spending in the Americas

OEM Spend Analysis – Americas H2 2004

An Assessment of the Top OEMs' Semiconductor Spending in Asia-Pacific

OEM Spend Analysis – Asia-Pacific H2 2004

An Assessment of the Top OEMs' Semiconductor Spending in EMEA

OEM Spend Analysis – EMEA H2 2004

An Assessment of the Top OEMs' Semiconductor Spending in Japan

Asia-Pacifica, EMEA, Japan, Americas) of its OEM Semiconductor Spending Analysis Stable ASP Encourages DRAM Module Revenue Growth

DRAM Modules—H2 2004

Crystals and Oscillators Ride the Wave

Frequency Control—H2 2004

LCD PriceTrak—October 2004

Wireless Systems Market Tracker—Q4 2004

China’s Independent Design Houses Face An Uncertain Future

DTV Semiconductor Market Tracker

Emerging Displays Review—October 2004

Component Health Watch (CHW)

Component Price Tracker (CPT)

Power Management Market Share and Supplier Analysis

October

Fourth Quarter Cooling—A Prelude to 2005

Power Management Market Tracker—Q3 2004

Strategic Display Outlook—Q4 2004

Solid State Lighting: Brighter LEDs Expand Illumination Applications

Light Emitting Diodes (LEDs) – An iSuppli Special Report – 2004

OEM Semiconductor Spending Analysis

Optical Transceiver Market: Starting the Long Road to Recovery

Networking & Optical Communications Topical Report

iSuppli Market Watch – China 11.22.04

Volume 3, Issue 22

China Facing Internal and External Challenges in IC Design

China Research – Q4 2004 – China Semiconductor Design

EMS and ODM Monitor—October 2004

VCAT and GFP Lord of the Rings

Networking & Optical Communications Topical – Q4 2004 – SONET/SDH Framers and Data Mappers Emerging Displays Review—September 2004

Component Health Watch (CHW)

Component Price Tracker (CPT)

Emerging Displays Review—September 2004

Projection Market Tracker—Q3 2004

LCD PriceTrak—September 2004

EMEA Projection Market Tracker Database—Q3 2004

Mobile Display Market Tracker Database—Q3 2004

Organic Light-Emitting Diode (OLED) Displays Report—H2 2004

LCD Market Tracker Database—Q3 2004

Worldwide Monitor Market Tracker—Q3 2004

Monitrak Final Database of U.S. CRT Monitor Shipments—Q2 2004

Compute Platforms Market Tracker Forecast Database

Core Silicon (ASIC & PLD) Market Tracker Forecast Database

DRAM Market Tracker Forecast Database

Electronic Components Market Tracker Forecast Database

Flash Memory Market Tracker Forecast Database

Networking and Optical Communications Market Tracker Forecast Database

Wireless Systems Market Tracker Forecast Database

Global LCD Supply/Demand Database—Q3 2004

Events

Speaking Engagements

Global Semiconductor Forum – GSF 2005

Who: Greg Sheppard – Executive Vice President

When: January 27-30, 2005

For more information and registration, visit: https://www.wendangku.net/doc/364138705.html,/

iSuppli Market Watch – China

11.22.04

Volume 3, Issue 22

About iSuppli Market Watch – China

iSuppli Market Watch – China is a semimonthly publication providing news and analysis on the electronics supply chain in China and Asia for subscribers and iSuppli clients. Articles in iSuppli Market Watch – China are written by iSuppli analysts and experts. Analysis, opinions and recommendations contained within iSuppli Market Watch – China articles are designed to help our clients make informed decisions regarding supply chain issues and to inform the marketplace about iSuppli activities and reports. We welcome any suggestions or feedback from readers. iSuppli Market Watch –China is edited by Byron Wu, senior analyst and manager of Ch ina research with iSuppli. Wu can be contacted at bwu@https://www.wendangku.net/doc/364138705.html,

About iSuppli Corporation

iSuppli Corporation, the global leader in electronics industry intelligence, provides a comprehensive suite of services for the EMS, OEMs, and supplier communities. Market Intelligence Services form the foundation of all iSuppli services providing critical information designed to enrich tactical decisions and strategic plans of electronic component suppliers and users. iSuppli employs th e world’s largest and most experienced staff of component, systems, and application market analysts. More information is available at https://www.wendangku.net/doc/364138705.html,

Copyrigh t 2000-2004 iSuppli Corporation. All worldwide righ ts reserved. Patents Pending. All information and intellectual property contained herein is the sole property of iSuppli Corporation.

Editor

Byron Wu

Senior Analyst and Manager of China Research

iSuppli Corp.011.86.755.8364.3145bwu@https://www.wendangku.net/doc/364138705.html,

Production Staff

Jonathan Cassell Editorial Director and Manager, Public Relations

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Neil Davis Senior Editor iSuppli Corp ndavis@https://www.wendangku.net/doc/364138705.html,

Editorial Staff

Anny Li

Industry Analyst, China Research

iSuppli Corp.ali@https://www.wendangku.net/doc/364138705.html,

Nancy Dang Industry Analyst iSuppli Corp.011.86.21.6427.8149ndang@https://www.wendangku.net/doc/364138705.html,

Kevin Wang Industry Analyst iSuppli Corp.011.86.755.8364.3182kwang@https://www.wendangku.net/doc/364138705.html,

Horse Liu Industry Analyst iSuppli Corp.hliu@https://www.wendangku.net/doc/364138705.html,

iSuppli Executive Management

Derek Lidow Greg Sheppard Tim Wang CEO and President Executive Vice President

Vice President iSuppli Corp.iSuppli Corp.

iSuppli Corp.dlidow@https://www.wendangku.net/doc/364138705.html,

gsheppard@https://www.wendangku.net/doc/364138705.html,

twang@https://www.wendangku.net/doc/364138705.html,