Following up on my earlier post regarding SMIC, I noticed this bit in EE Times Asia.  They’re covering an IDC report suggesting that China’s domestic semiconductor market will hit $28B in 2011.

While the whole article is interesting, I was particularly drawn to their analysis of the segments contributing to this figure:

“Based on its forecast and analysis for the China semiconductor market, IDC said that the computing segment will account for over 62 percent of the total China semiconductor market in 2011, with growth driven by portable PC and server markets. The digital consumer semiconductor segment will continue flourishing driven by DTVs, digital STBs, game consoles and handheld gaming, added IDC. Finally, the 3G launch in China is touted critical to maintain market momentum in the mobile phone arena.”

I am a bit surprised to note that the computing segment will account for the majority of the China market in 2011.  Prior to reading this report, I would have guessed that either mobile communications, or digital consumer products would have been the dominant demand drivers in China’s rapidly expanding consumer markets.

I wonder how much of this demand will be met by SMIC’s in-country fab lines.  Does the Taiwanese government still prevent companies like TSMC and UMC from building foundries in China?  If so, I’m afraid that Tiawan’s pure play foundries will be at a serious competitive disadvantage when it comes to getting a share of this $28B.

Technorati Tags:  China, China Outsourcing, Semiconductor, SMIC