IIC-China expands to new locations despite economic slowdown

The 14th International IC-China Conference & Exhibition (IIC-China) opened at Shenzhen Convention and Exhibition Center from 26 – 27, February. IIC-China, the only systems design event in mainland China, did not scale down this year amid global economic crisis, but expand to new locations like Xi'an and Wuhan.

The move represents the industry trend of developing westwards. Global Sources believes this is because western cities like Xi'an and Wuhan have very good network of high schools and a pool of talent . These cities have their own advantages, a driver for the IC industry to develop rapidly. In fact, the selection of the new locations was to meet exhibitors' demand. And Huawei and ZTE, two big-name companies representing Shenzhen, have bought land in Xi'an and are building large factories for future development in the West.

Mainland China remains world's largest electronics production base

Mark A. Saunderson, President of Global Sources' Electronics Business Unit, said: "Mainland China's electronics exports may have slowed down from the double-digit growth we are used to, but they remain robust. Mainland China is the single largest source of manufactured electronics worldwide. It is an industry driven by both global and domestic demand.

"Recent mainland China government policy is expected to expand demand for consumer electronics in mainland China. The breadth and size of the market, coupled with favorable policy are expected to support the international technology companies that supply this industry.

"With the recent dramatic market changes, electronics manufacturers recognize there is no longer a place for low-price, 'me-too' products. They are now focusing on quality and innovation to survive and prosper. Engineers working for these companies must keep apace of latest design possibilities and new technology. Their job depends on inspired design, and inspired design demands new technology – in a word, innovation; and innovation is what IIC-China is all about.

"At a time when marketing and promotion are key to survival and growth, exhibitors use IIC-China to stand out from the crowd and leapfrog competitors who are pulling back."

With mainland China ranked as the world's largest IC market, companies like Altium, Analog Devices are seizing this opportunity to exhibit their latest products and services to mainland China's engineering community

Change in buying habits bring about new challenges and opportunities

Despite falling consumer spending worldwide, many international buyers plan to increase imports this year, particularly from China. These and other findings are highlighted in the 2009 Importer Survey, completed this month by Global Sources.

Concerns over supplier stability and changing product requirements are driving up the frequency of buyers' communication with suppliers, and a small group of major buyers remain in control of the vast majority of imports in developed markets such as the U.S.

"Close to 50% of surveyed buyers expect to maintain or increase their total import value in 2009," said Global Sources' COO, Craig Pepples. "We see a slight decrease in average price per item, and we know today's buyers require more flexibility in terms of order size. But China remains at the center of their sourcing plans, with 57% of surveyed buyers expecting to increase or maintain their total value of imports from China in 2009, as compared to 2008."

The survey also indicated that buyers are reviewing all their options and sourcing more cautiously to reduce risk. Surveyed buyers also indicated that the most effective ways for suppliers to win orders are to improve product quality, provide better prices and accept smaller order sizes. According to another survey conducted by Global Sources' Chief Executive China magazine early this month, China's suppliers remain optimistic about sales growth prospects in 2009, with 47% of executives expecting sales growth of 10% or more in 2009.

Shenzhen suppliers lag behind the world in manufacturing standard

Secretary-General of Shenzhen Semiconductor Industry Association, Cai Jinjian, said: "The Shenzhen IIC-China used to be a show of foreign IC companies. It had only a few Chinese exhibitors. But now it has changed. Many local IC firms are participating in the event to put their products under the spotlight. Now, this event has a more fitting name."

Cai Jinjiang believes that, while Shenzhen's IC industry is well established, some of its manufacturers are not up to the standard.

He said Shenzhen's IC industry is quite strong in innovation, and Shenzhen's manufacturers in fact have very good designs that can rival the world's highest standard, but their manufacturing standard lags behind. He said: "To prosper in the face of the slowdown, Shenzhen suppliers need to start with the products for which China sets the standards. Upgrading manufacturing standards is key to the upgrade of Shenzhen's entire IC industry."

Chief Executive Analyst of Electronics Engineering Times – China and Electronic Design – China, Yorbe Zhang, said China remains the largest electronics production base and its strong domestic demand is expected to offset the loss in export sales and drive the growth in 2009. He acknowledged that China's electronic manufacturing standard is a bit lags behind, but amid the financial crisis, people tend to cut down on purchase of high-end products, and there is always a market for lower-priced products. He believes that China suppliers, who provide value-for-the-money products, have a good chance to grow despite the economic gloom.