INTERVIEW-TI aims for bigger slice of China chip market http://today.reuters.com/business/newsArticle.aspx?type=technology&storyID=nSHA172551&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=BizArt-C1-ArticlePage2
Fri Jul 7, 2006
By Doug Young and David Lin
QINGDAO, China, July 7 (Reuters) - Microchip giant Texas Instruments (TXN.N: Quote, Profile, Research) said its China chip revenue is likely to increase by more than 20 percent this year as it gains a larger share in the country's fast-growing semiconductor market.
"In the past few years we have grown more than 20 percent," Terry Cheng, the company's Asia president, told Reuters on Friday in an interview on the sidelines of SINOCES, one of China's largest consumer electronics shows in the eastern port city of Qingdao.
"We are cautiously optimistic about this year. If the market is good, we can maintain that rate. So far it's been good in the first half of the year." Texas Instruments sees China's market this year growing by 15 to 20 percent based on industry estimates, he said.
The Dallas-based company makes chips for everything from flat-panel TVs to calculators and is the world's leading producer of chips used in cell phones.
Cheng declined to comment on TI's individual sales for China, saying the company does not break down sales by country.
But Asia accounted for more than 40 percent of the company's more than $12 billion in semiconductor revenue last year, with China as one of the company's fastest growing markets.
China's semiconductor market was worth nearly $50 billion last year, according to various industry estimates. Cheng said he expects the market to keep growing rapidly, with broadband, third-generation (3G) telecoms and digital TV acting as major drivers in the years ahead.
Texas Instruments' leading edge in the cell phone industry is based on its dominant position in current technology known as GSM. But as much of the world moves to newer third-generation (3G) technology, the company is hoping to carry its leading position to WCDMA, the 3G standard succeeding GSM.
Late last year TI introduced its first WCDMA chip in Japan, with plans to expand to other areas of the world. Its current WCDMA chip customers include Nokia (NOK1V.HE: Quote, Profile, Research) and Japanese players such as NEC (6701.T: Quote, Profile, Research) and Sharp (6753.T: Quote, Profile, Research).
It competes in the 3G chip sector with Qualcomm Inc. (QCOM.O: Quote, Profile, Research) and Freescale Semiconductor Inc. (FSL.N: Quote, Profile, Research), the former chip-making unit of Motorola Inc. (MOT.N: Quote, Profile, Research).
Cheng said Texas Instruments has already gained half of the global market for WCDMA chips, with the company's 3G chip sales passing the $1 billion mark last year from $600 million in 2004.
"Based on our experience in 2G chips, I think we can maintain the 50 percent" market share, he said.
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