China’s Electronics Industry with an Asian Perspective Professor Y C Chan EPA Centre, City University of Hong Kong Professor Michael Pecht CALCE EPSC, University of Maryland May 17, 2004

Book: China’s Electronics Industry Technologies, manufacturing, capabilities, and infrastructure of China’s electronic industry. Different sectors of China’s electronic industry: semiconductors, electronic packages, printed circuit boards, computer hardware and software, telecommunications, and various electronic systems. Roles of research government, associations, research organizations, educational institutions, science and technology information networks, and major companies in establishing the infrastructure of China’s electronic industry. Edited by M.G. Pecht (CALCE EPSC, University of Maryland), Y.C. Chan (City University of Hong Kong).

China’s Electronics Industry Now PC: 48 million units in 2004, up 29% from 2003 TV: 58.2 million sets in 2004, up 7.4% from 2003 Handset: 570 million global shipments in 2004, China to produce 211 million, roughly 37% of the global production Automotive electronics: to grow nearly 40% in 2004 from 2003 Source: iSuppli

In the Nation’s 10th Five-Year Plans ( ) Develop ICs, new devices, new computers, and telecommunication equipment Develop microchip devices, new displays, and photoelectric devices Achieve breakthroughs in basic and strategic high-tech studies; Questions: What is the current status? Is there any breakthroughs? How is the future? China’s Electronics Industry

China ’ s R&D Expenditures GERD: Gross Expenditure in Research and Development GERD GDP

S&T Spending in China and the US China/US in GDP (2003): ~14% Source: UNESCO, China S&T Statistics 2002, Data Books , MOST 2004, OECD

China’s Indigenous IC Development A 32-bit 266-MHz CPU Released in December 2003 developed by China’s BLX IC Design Corp., a CAS spin-off to be marketed for China’s domestic manufacturers of set-top boxes, smart televisions, digital video recorders, and thin-client personal computers kicked off in 1999, first introduced in 2002, a next-generation under the development United-863 chip Released in December 2003 developed by the Micro Processor Research and Development Center (MPRC) of Peking University touted as the first China-developed system-on-a-chip (SOC) and designed for the Linux operating system Shenxin I and Shenxin II Released in December 2003 the Institute of Super-large-scale Integrated Circuits in Tongji University, a Shanghai-based University designed for 3G W-CDMA, CDMA2000 or TD-SCDMA networks handsets

China Closing the Semiconductor Technology Gap / US China SIA Road Maps Feature Size (microns):

Japan Taiwan Korea Pearl River Delta Hong Kong Malaysia Singapore Changjiang River Delta Shanghai

Notes: 2001 and 2002 are current figures at current exchange rates and 2004 are forecasts at rates (i.e. inflation is not included) Source: Reed Electronics Research Hong Kong 7,0335,5484,3473,702 Indonesia 9,6929,1249,2559,824 Japan 189,366162,313170,004179,878 Malaysia 39,50637,81739,95143,728 Philippines 11,03611,29711,64212,705 Singapore 34,97136,44435,57838,396 South Korea 53,64960,28764,03269,793 Taiwan 39,01339,14940,34943,443 Thailand 14,35014,61115,74417,709

JAPAN – critical component & materials KOREA – LCD, IC, cell phone, camera modules TAIWAN – IC foundries, flex circuits SINGAPORE – ODM, computer peripherals MALAYSIA – EMS / OEM Other Major Asian Players

Summary In some areas, such as telecommunications and semiconductor technologies, China has made breakthroughs. The huge domestic telecom market has also helped China to advance quickly on telecom technology development. China as major electronics manufacturing hub. Synergy with other major Asian players in providing critical components / materials