China cashes in on consumer electronics bonanza

By Robert Jaques on Oct 13, 2006 11:51 AM
Filed under Hardware

In-Stat predicts market to double in four years.

Low labour costs and a fast-growing domestic market will spur China's consumer electronics manufacturing industry to more than double by 2010, market watchers predicted today.

Analyst firm In-Stat reported that the industry will grow from US$71.5 billion in 2006 to US$167 billion in 2010.

China's mature supply chain, skilled labour force and convenient logistics are key factors in attracting outsourcing manufacturers from abroad.

"About two-thirds of China's electronics manufacturing revenue comes solely from foreign-funded or Sino-foreign joint ventures," said In-Stat analyst Anty Zheng.

"The world's top 10 electronics manufacturers have all invested in China and consider China to be a key region in their global manufacturing facility layout."

The newly published In-Stat report estimates that Chinese electronics manufacturing companies contributed about eight percent of China's total US$425 billion electronics manufacturing industry revenue in 2005.

Compared to its mature manufacturing environment, the study rates China's R&D ability, especially in chip design and solutions, as weak. Over 90 percent of chips for electronic manufacturing still depend on imports.