iSuppli predicts that nearly 20% of China’s fabless semi companies will fold up within the next two years.  As I have contacts with some of these groups, I’m mostly surprised that the number isn’t a bit higher.  The combination of tight financing and shrinking global markets for the end products has pushed a number of my friends right to the brink.  According to the story,

“‘The majority of China’s IC firms are short of capital and face cash flow problems,’  iSuppli said. The launch of another stock market in Shenzen has been postponed because of the global economic financial crisis, it added, and venture capitalists generally lack interest in China’s IC industry. But iSuppli expects at least five companies will seek initial public offerings on the Nasdaq stock exchange and at least 10 companies will be involved in mergers next year.”

I guess that this is what happens when too much money chases too few good ideas and skilled managers.

Technorati Tags:  China, China Outsourcing