PricewaterhouseCoopers Analysis: Domestic Use of Chips in China Escalates Rapidly

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Review of 2005 statistics shows consumption of semiconductors for end products sold in China rose to 40% of total in 2004

SAN JOSE, CA (SEND2PRESS NEWSWIRE) -- Domestic consumption of semiconductors in China now represents at least 40% of total integrated circuit (IC) consumption in China, according to a comprehensive analysis by PricewaterhouseCoopers of Chinese and other published statistics on the subject. The report states that total semiconductor sales destined for domestic end-users in the Chinese market totaled $16.8 billion in 2004, the most recent year for which data are available.

Overall consumption of semiconductors in China (for both domestic use and export) accounted for nearly one fifth (19.6%) of worldwide semiconductor sales, or $41.8 billion in 2004, according to the same report. Only Japan, at 23.4 percent, outpaced China in semiconductor consumption.

At the same time, China accounted for 19 percent of new worldwide potential wafer-fab capacity created in 2004. However, continued growth in electronic systems manufacturing in China (where chips are used for production of PCs, mobile phones, and other systems) has resulted in a widening gap between IC production and consumption (for both the domestic market and export). This gap between production and consumption increased by $7.7 billion to reach $25.8 billion in 2004.

"While the increase in the semiconductor sales in China for domestic consumption is very impressive, it still represents a relatively small percent of total sales," explains Raman Chitkara, Global Managing Partner of Semiconductor Industry Services at PricewaterhouseCoopers. "Domestic consumption by the Chinese market has yet to become a driving consideration for semiconductor manufacturers."

The 2005 update to China's Impact in the Semiconductor Industry evaluates the current status of the semiconductor industry in China, assesses geographical and product category demand, reviews shifts in the semiconductor value chain, and concludes with a consideration of the three different IC production growth scenarios. To obtain a copy of the 55-page report, visit

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The global Semiconductor practice of PricewaterhouseCoopers ( enables its clients to weather the industry's cycles by assisting them in improving time to market, managing global distribution, and optimizing channel management.
PricewaterhouseCoopers' Technology Center provides analysis of technology trends and their effects on companies, industries, and markets, and is widely known for its industry-focused publications and for delivering insightful briefings on technology trends to PricewaterhouseCoopers clients and industry leaders around the world.

For more information, please visit

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Unless otherwise indicated, "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership. PricewaterhouseCoopers LLP is a member firm of PricewaterhouseCoopers International Limited.

Cassie Arnold, 408/817-7926 or Alan Morrison, 408-817-5723

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REFERENCES: , , China's Impact in the Semiconductor Industry, PricewaterhouseCoopers, 2005 report, Overall consumption of semiconductors in China, Domestic Use of Chips in China, worldwide semiconductor sales, IC production, semiconductor, integrated circuits, analysis of technology trends and their effects on companies, industries, and markets, Price waterhouse Coopers, San Jose, California , news, press release from PricewaterhouseCoopers, Jan 10, 2006, Reports and Studies, , , , , PricewaterhouseCoopers Analysis: Domestic Use of Chips in China Escalates Rapidly