Designing a better Electronics Industry in China

Of the 70 million color television shipments in China in 2006, 20 million were produced by Original Design Manufacturers (ODMs) and Electronic Manufacturing Services (EMS) providers. With several dozen DTV design houses emerging in China, they are beginning to provide both Semi-Knock Down (SKD) and Complete Knock-Down (CKD) services domestically in cooperation with semiconductor suppliers. “These design houses will play an important role in supplying television chips to Chinese manufacturers, similar to what occurred in China's mobile-phone industry," said Bryon Wu, director of iSuppli's China research. Speaking of mobile phones, besides being one of the world leaders in handset manufacturing, China now is trying to become a major force in handset design as well. Local design of handsets reached 129 million units in 2006, with that number expected to grow to 170 million in 2007 due to increasing shipments from Chinese handset OEMs, Independent Design Houses (IDHs) and ODMs, iSuppli predicts. Chinese domestic handset OEMs will continue to strengthen their in-house design capabilities in order to decrease the risk of over-reliance on IDHs. Improving design capability will help domestic OEMs to reinforce their competitive positions.