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Chinese OEMs Show Strong Growth
Online staff -- Electronic News, 2/15/2005
Once-obscure Chinese OEMs are moving into the headlines and rising up through the ranks of the world's electronic goods makers, according the latest research from iSuppli Corp.
Total electronics systems production in China rose to $209.5 billion last year, up 13 percent from $185.5 billion in 2003, while the nation's OEMs racked up 14 percent growth, according to the El Segundo, Calif.-based market research firm.
China’s top 50 OEMs outperformed the market, with a 23 percent year-on-year increase in sales. System production for the top 50 OEMs accounted for about 76 percent of all Chinese OEM system output in 2003, and this percentage rose to 83 percent last year.
Chinese OEMs have gained worldwide attention in recent times, iSuppli noted, with Chinese computer maker Lenovo's planned acquisition of IBM's PC business late last year along with the move by consumer-electronics manufacturer TCL to take majority control over Thomson’s television business near the end of 2003.
iSuppli predicts that within a few years, China’s OEMs may be famous for being among the world’s largest electronics producers and most prominent brand names as they expand their businesses overseas.
A listing of the top indigenous Chinese OEMs in 2004 showed that among the top 10 Chinese OEMs, telecommunications gear maker Huawei led the pack with a 71.8 percent increase in revenue from 2003 to 2004. Huawei competes directly with Cisco, Lucent and Alcatel and projected that 40 percent of its 2004 revenues were derived from sales outside of China.
TCL was the second-strongest performer among the top 10, with its sales rising 62.9 percent over 2003.
TCL established with two joint ventures in 2004 – one with Thomson and the other with Alcatel – that are credited as allowing the company to emerge as the world’s largest TV OEM and as the seventh-largest handset OEM. A strong position in China’s domestic TV market and its efforts to explore emerging markets, including Vietnam, the Philippines and Indonesia, likely will assist in bringing about brisk growth in its TV business, iSuppli believes.
Finally, iSuppli believes the bigger OEMs will grow even larger with the top 50 OEMs eventually comprising more than 90 percent of China’s OEM system production in 2008.
