IC market hopes to gradually recover and look forward to the introduction of rules as soon as possible

Affected by the declining demand from European and American markets and the weak recovery of the global economy, the market growth rate of China's integrated circuit industry has apparently declined since 2011. At the "SEMICON China, SOLARCON China and FPD China 2012" conference held in Shanghai recently, experts said that the IC market began to recover in the first quarter of this year, and it is expected that the second quarter economic recovery is expected to gradually recover. At the same time, the industry is generally looking forward to the implementation of the "Detailed Document No. 4" issued by the state to support the development of the integrated circuit industry as soon as possible so as to provide enterprises with a better industrial environment and policy support.

China's IC market slows down but industry outlook remains good

According to the latest statistics from the China Semiconductor Industry Association, the global semiconductor market in 2011 increased by 0.4% year-on-year to approximately 299.5 billion U.S. dollars. Among them, the scale of China's IC market in 2011 was 806.56 billion yuan, an increase of 9.7% over the same period of last year, and the increase was much smaller than the increase of 29.5% in 2010.

In 2011, China's IC design industry maintained rapid growth. Its annual sales revenue was 47.37 billion yuan, a year-on-year increase of 30.2%. At the same time, however, the growth rate of IC manufacturing industry declined significantly, and the packaging and testing industry experienced negative growth. Affected by the sluggish international market and the earthquake in Japan, the overseas orders of enterprises have been greatly reduced. The chip manufacturing industry's growth rate was 8.9% year-on-year, 22% lower than the growth rate in 2010, and the scale was 48.69 billion yuan; sales revenue of the packaging and testing industry The year-on-year decline was 2.8% and the scale was 61.16 billion yuan.

Although the growth rate of China's integrated circuit market slowed down in 2011, in the eyes of experts, the global semiconductor market is expected to gradually emerge from the gloom of weak market demand in 2012. Driven by the growth of domestic demand market and the development of new generations of strategic emerging industries such as information technology, energy conservation and environmental protection, China's IC market will continue to be the most dynamic and promising regional market in the world, which will in turn promote the rapid development of China's IC industry.

According to Dennis P. McGuirk, president and CEO of SEMI, “The outlook for the 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 area in China. In the future, China will become a powerful one in the IC world. member".

CCID Consulting believes that the growth rate of China's integrated circuit market will remain at about 9% in the next few years, and the main driving force is still mainly from PCs, mobile phones, LCD TVs and other electronic products with higher output. In addition, emerging applications will become one of the drivers of market growth. The development of new areas such as the Internet of Things, cloud computing, new energy, semiconductor lighting, medical electronics, and security electronics will bring new impetus to the Chinese integrated circuit market.

The market has rebounded in the first quarter and is expected to rebound in the second quarter

Due to the decrease in demand for integrated circuits from end-customers, global industrial inventories intensified in the fourth quarter of 2011. Many IC companies’ inventory days increased in the fourth quarter compared to the third quarter, while operating income fell in a chain-on-quarter ratio. Under this situation, some semiconductor companies have further cut their excess inventory since the fourth quarter, and many manufacturers adjust their capacity utilization rates according to the ever-declining orders. With the ever-declining end-customer inventory, the orders of IC manufacturers have begun to improve this year.

“I'm very happy that the semiconductor industry has passed through the haze of 2011. Affected by the global natural disasters last year, the relevant industry chain of the semiconductor industry was not hurt. From the first quarter of 2012, the entire semiconductor industry is It is hoped that the semiconductor market will usher in the spring in the second quarter, said Qiu Ciyun, CEO of SMIC.

As the largest semiconductor foundry company in Mainland China, SMIC recently released its fourth-quarter 2011 financial report, which showed that the company’s total sales for the fourth quarter were US$289.6 million, a 29.1% decrease year-on-year and a net loss of US$165.6 million. According to SMIC's forecast, with the enhancement of customer confidence and the recovery of the economic environment, the company's revenue for the first quarter of 2012 is expected to increase by 7% to 9%.

Wang Qingyu, president of the semiconductor foundry company Shanghai Advanced Semiconductor (03355.HK), also said recently that due to external factors, customers were more cautious in entering the goods last year, causing the company's net profit to fall. However, the order situation began to improve in the second quarter of this year. Although some customers are still cautious, customers with strong cash flow have already placed orders.

China Everbright Securities analyst Zhou Liqian recently released a report that the economy of the IC industry began to recover in the first quarter of this year, but it is still in the bottom region. Many growth companies that the market is concerned with will face the test of a quarterly report.

Supporting the implementation of the New Deal has been enacted and implemented in detail.

In order to promote the development of the integrated circuit industry, on January 28, 2011, the “Circular of the State Council on Printing and Distributing Policies to Further Encourage the Development of the Software Industry and the Integrated Circuit Industry” (referred to as “Document No. 4”) was officially released, clearly stating that it would Financing, import and export, etc. provide policy support to the industry.

In late February of this year, the Ministry of Industry and Information Technology issued the "12th Five-Year Development Plan for the Integrated Circuit Industry". By the end of the "Twelfth Five-Year Plan," the domestic integrated circuit industry will more than double and the output will exceed 150 billion. Sales revenue reached 330 billion yuan. The issuance of the plan is considered to have important guiding significance for promoting China's integrated circuit industry to become bigger and stronger, and promoting the integrated, coordinated and rapid development of the integrated circuit industry.

Gu Wenjun, a senior analyst at China's semiconductor industry at iSuppli, told reporters that there is still a gap between the planning content and the needs of current IC manufacturers to a certain extent. Enterprises need some more targeted and operational supportive policies, such as tax incentives and others. Some policies that are more in line with the laws of industrial development, at the same time, it is best to introduce specific policies that encourage mergers and acquisitions integration and strengthen international mergers and acquisitions. “In addition, No. 4 document has been published for a year now, but the detailed implementation rules have not yet come out. In this regard, we especially hope that we can speed up the pace.”

In an interview with the reporter, Wang Xiaolong, a researcher at the Tuoba Industry Research Institute, also believed that compared to the "12th Five-Year Plan" of the integrated circuit industry, domestic IC manufacturers may now place more emphasis on some substantive preferential policies formulated by the General Administration of Taxation and the General Administration of Customs. . In addition, some specific supporting policies introduced by local governments will usually be combined with actual situations such as the “Twelfth Five-Year Plan” and local financial resources, and they will also attract the attention of integrated circuit companies.

Jiang Shoulei, secretary-general of the Shanghai Integrated Circuit Industry Association, pointed out to reporters that the current domestic IC industry is facing a major challenge in terms of insufficient investment. Compared with the huge investment of some IC companies in foreign countries, the scale of investment by domestic companies is relatively small, restricting Businesses can't catch up with speed. In this regard, we must be able 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 priorities of the IC industry in 2012 is to implement the implementation rules for the No. 4 document, and to “promote enterprises in the No. 4 document to further encourage the development of the IC industry. Regulations on the implementation of income tax, business taxation for integrated circuit design companies, and accreditation methods for key integrated circuit design enterprises under the state plan layout will be issued as soon as possible to examine the preferential corporate income tax policies for packaging and testing, integrated circuit equipment, and key materials."