Invest in China, IDC tells chipmakers

Multinational chip suppliers should make China a part of their global strategy in light of the growing opportunity and competitive threat in the world's third-largest semiconductor market, researcher International Data Corp (IDC) said in its latest report.

"China will continue to grow at twice the pace of the entire semiconductor industry over the next five years, hence foreign suppliers must continue to invest and participate in the this market to capitalize on the opportunities," IDC analyst Betty Lin (林蓓黎) said in a report released on Tuesday.

As China is catching up to its bigger rivals, chip suppliers should develop contingency plans and make the country part of their global strategy, to counter the rising threat posed by Chinese chipmakers, Lin said.

China developed into the world's third-largest semiconductor industry last year with revenue skyrocketing to US$26 billion from US$2 billion during the 1990s.

Lin also said that the Chinese government's policies to subsidize local chipmakers have and will help smaller suppliers start to exert an influence in the global semiconductor industry.

Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路), China's biggest chip supplier, set an example. SMIC, started about five years ago, already had a 6 percent share of the world's foundry business last year, according to IDC.