092806-semiconductor.jpgChina will this year overtake both South Korea and Germany to become the fourth most important country for electronics design.

China's strengths in electronics manufacturing are well known in the
west — it is already the world's top TV manufacturer — it wants to
move up the value curve and undertake more electronics design.

According to the latest data
from iSuppli, a US research firm, the strategic shift is paying off.
China is poised to move up from sixth to fourth position in the league
table of countries as measured by their spending on semiconductors for
electronics design.

China's spending in this area is predicted to grow 25% this year to $11.6bn, surpassing both Germany and South Korea.

to iSuppli, China's advance is being driven by its extensive work in
the computer design area. Furthermore, companies increasingly are
moving operations out of western Europe and into China , boosting the
nation's activities in this area.

The next nation in China's
sights is Taiwan, which already does most of its electronics
manufacturing in the PRC but now faces the prospect of its design
contracts also shifting to the mainland. See yesterday's EngagingChina story for an insight into how one Taiwanese electronics firm operates in China.

US and Japan continue to lead the league table and their electronics
design industries will spend $62bn and $44bn respectively on
semiconductors this year, according to iSuppli. While US and Japanese
giants like Dell and Sony manufacture in China, the electronics design
work is still largely done in their home countries

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