A Guide to Your Business in China

MARKET REPORT

2009 Report on China's Mobile-Phone Chip

(MPC) Market

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 Market Avenue 2009 Report on China's Mobile-Phone Chip (MPC) Market

Description

The size of China's mobile-phone chip (MPC) market reached RMB110bn in 2008, with the YoY growth rate of 6%, down
to one-digit for the first time in many years. That means China's MPC section has moved from fast- to stably-growing track,
and would hardly deliver any explosive expansion in the next few years.

Reducing output of end products restraining increase of chips

Output of mobile phones is the essential factor that influences the development of MPC market. The Output of mobile
phones was 750 million units in China in 2008, up by 8.6% year-on-year, a slower increase rate than that in the previous
year. Among the total output, that of inferior-branded mobile phones, to which the industry pays attention, was 150 million
units. The reasons for the slowdown include: 1). The global market shrank because of the financial crisis, and therefore
the output of mobile phones showed obvious decline compared to previous years. 2). Although the number of
inferior-branded mobile phones grew dramatically in 2007, it didn't change much in 2008, so inferior-branded mobile
phones didn't help the growth of chip market much.

Emerging producers in Taiwan and mainland China are changing the landscape of MPC market

The competitive landscape in the market changed dramatically in 2008, during which Infineon acquired Agere, NXP
bought Silicon Lab, MTK purchased ADI's mobile phone production line, and ST and NXP merged their wireless business
together. Companies from Taiwan and Mainland China started playing more important roles in the market. MTK, the
Taiwanese chip company, was a bright star, whose shipment accounted for 23% of the total in the market, with as its target
the inferior mobile-phone brands in mainland China. TI accounted for 13% of the market with its advantage of having
partnerships with multinational companies and advantage in the fields of intelligent phones and WCDMA baseband chips.
But TI has declined much as a MPC producer in recent years, and has shifted its focus to application processors.
Qualcomm accounted for 12% of the market with its monopoly position in the CDMA area, while Infineon, ST-NXP,
Freescale and Broadcom also had significant shares in the market with advantages of their each own. In addition to them,
a mainland MPC company named Spreadtrum had been growing rapidly, and has attracted attention from local mobile
phone companies in areas of GSM and TD-SCDMA.

Growth of multimedia and memory chips being lackluster

Baseband processing modules, multimedia and memory chips were the three major application products in the MPC
market, with their total market share of about 70%. Baseband processing modules accounted for 27%. Although
competition was fierce in this area, the average price hadn't showed obvious decline because baseband processing
modules were highly integrated and the share of top-end chips was high. The multimedia chip market owed its emerging
to the high penetration of mobile phones with multimedia functions. But multimedia applications, such as MP3 and
photographing, had showed signs of saturation after a few years of increase, while new applications hadn't yet been
developed. On the other hand, the performance of baseband processing modules had been improved ceaselessly, so that
many mobile-phone solutions were able to achieve MP3, photographing and other functions without the need of adding
extra co-processors. Therefore the market share of multimedia chips had shrunk a bit, to 20% in 2008. At the same time,
memory chips had also been improved, but the prices dropped. The share of MCP, a memory product, had further
increased. As a result, the market share of memory chips increased as a whole, to 21%. In addition to the
above-mentioned three major areas, the applications of chips for intelligent mobile phones only accounted for 4.1% of the
market. But the impending 3G era would increase top-end mobile phones, and therefore intelligent chips would have a
good future.

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 Market Avenue 2009 Report on China's Mobile-Phone Chip (MPC) Market

New applications would be the major sources of growth in the future

Other potential applications in the MPC market include GPS, TV, Wifi, paying and other functions. As prices of chips
dropping and relevant policies being released, those applications would be popular among mobile phones. New-type
mobile phones would be the major sources of growth of the MPC market in the next couple of years.

Table of Contents

Chapter One: Overview of China's Mobile-Phone Chip (MPC) Market, 2008

1.1 Industrial Environment
1.2 Scale of the Industry
1.3 Mix of Mobile Phones in China, 2008
1.3.1 Models of Mobile Phones (superior/inferior brands)
1.3.2 The Patterns Mobile Phones Work in (GSM, CDMA, EDGE, WCDMA, CDMA2000…)
1.3.3 Functions of Mobile Phones (Photographing, MP3, Video…)
1.3.4 Intelligent Mobile Phones
1.4 Features of China's Mobile Phone Industry in 2008

Chapter Two: Overview of China's MPC Market, 2008

2.1 Market Size and Growth of Market
2.2 Basic Features of the Industry
2.3 Market Structure
2.3.1 Mix of Products
2.3.2 Application of VSS
2.3.3 Mix of Brands
2.3.4 Demand from Companies

Chapter Three: Niche MPC Markets in China, 2008

3.1 Baseband Chip
3.1.1 Market Size and Growth of Market
3.1.2 Structure of the Niche Market
3.1.3 Features of Market Demand
3.2 RF Chip
3.3 Power Management
3.4 Application Processors
3.5 Memory
3.6 Multimedia Application
3.7 Wireless Access
3.8 New Applications (GPS, Mobile TV, Mobile Paying)

Chapter Four: Competitive Landscape of China's Mobile-Phone Chip (MPC) Market, 2008
4.1 Competitive Landscape
4.2 Major Producers
4.2.1 TI
4.2.2 Qualcomm

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 Market Avenue 2009 Report on China's Mobile-Phone Chip (MPC) Market

4.2.3 MTK
4.2.4 Infineon
4.2.5 ST-NXP
4.2.6 Spreadtrum

Chapter Five: Outlook for China's Mobile-Phone Chip (MPC) Market

5.1 Developing Trend in China's Mobile-Phone Chip (MPC) Market, 2009-2011
5.1.1 Products and Technology
5.1.2 Prices
5.1.3 Channels
5.1.4 Services
5.2 Forecast for Development of China's MPC Market, 2009-2011
5.2.1 Forecast for Size of China's MPC Market, 2009-2011
5.2.2 Forecast for Structure of China's MPC Market, 2009-2011
5.2.2.1 Mix of Products
5.2.2.2 Application of VSS

Selected Charts

Scale of Production of Mobile Phones in China, 2008

Structure of Production of Mobile Phones in China, 2008
Mix of Applications in China's Mobile-Phone Chip (MPC) Market, 2008
Mix of Products in China's Mobile-Phone Chip (MPC) Market, 2008
Size of Baseband Mobile-Phone Chip Market in China, 2008
Mix of Products of Baseband Mobile-Phone Chip Market in China, 2008
Size of RF Mobile-Phone Chip Market in China, 2008
Mix of Products in RF Mobile-Phone Chip Market in China, 2008
Market Size of Application Processors for Mobile Phones in China, 2008
Market Size of Mobile-Phone Memory Chips in China, 2008
Mix of Products in China's Mobile-Phone Memory-Chip Market, 2008
Size of Multimedia Mobile-Phone Chip Market in China, 2008
Mix of Products of Multimedia Mobile-Phone Chip Market in China, 2008
Forecast for Size of China's MPC Market, 2009-2011
Forecast for Mix of Applications in China's Mobile-Phone Chip (MPC) Market, 2009-2011

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