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China's Consumer Electronics Industry Expected to Grow by More Than 89 Percent to US$94 Billion by 2007

Global Sources Report Shows Shift to High-End Products: Digital Devices Drive Growth

HONG KONG, August 26 /Xinhua-PRNewswire-FirstCall/ -- Global Sources Ltd. (Nasdaq: GSOL) today released its Consumer Electronics Outlook: China annual report which indicates strong growth in the consumer electronics industry and that manufacturers are shifting output to high-end products as they move away from price-based competition.

The report is published by the company's China-based electronics
publications, Electronic Engineering Times-China (EE Times-China) and Electronics Supply & Manufacturing-China (ESM-China). It provides an in-depth analysis of China electronics manufacturing, with sections on key suppliers, eight major product sectors, semiconductor demand and supply, and the technical design challenges facing the industry.

Mark A. Saunderson, publisher of EE Times-China and ESM-China, said: "China's consumer electronics industry is expected to post $49.6 billion in sales revenue this year, growing by more than 20 percent annually to reach $94 billion in 2007. Manufacturers are shifting to high-end products to differentiate themselves from the low-end competition, and their integrated circuits (IC) consumption demonstrates this. In 2003, unit sales of ICs for
digital consumer products grew by more than 22 percent, but ICs for traditional products, such as electronic toys and watches, rose by less than 14 percent."

The Consumer Electronics Outlook: China report shows that China
manufacturers are employing more advanced technologies in eight major product segments: color TVs, DVD players, home theater systems, in-car entertainment, digital still cameras, MP3 players, personal digital assistants (PDAs) and household appliances.

Manufacturers of color TVs are beginning to export LCD and plasma display models and are reducing their emphasis on traditional cathode-ray tube TVs. Companies are investing in the design and production of DVD recorders, the advanced alternative to DVD players. In the home theater sector, manufacturers are exploring Internet connectivity and are integrating hard
disks into their product designs.

Makers of in-car entertainment are also shifting towards advanced systems that feature LCD screens, digital video playback and surround sound capability. Digital camera manufacturers are upgrading their products with higher resolution - above three million pixels, and MP3 player suppliers are developing hard disk-based designs that offer greater storage capacity. PDAs contain more entertainment functions plus wireless connections to other devices.

"In the near and medium-term, China will continue to rely on imported ICs, particularly for high-end products, as local design capability has yet to achieve this level of expertise," Saunderson said. "This year, China will import 94 percent of its IC requirements, and because of this dependence, China's dynamic electronics industry will continue to present opportunities for international technology vendors."


Strong Growth in IC Design Industry

The Consumer Electronics Outlook: China report also cites the growing strength of China's IC design industry. China now has more than 463 design houses and the trend is towards 0.25 micron and finer processing technologies.
It is expected that output of locally designed ICs will grow by 37 percent annually from 2003 to 2007.

The report is the first of a three-part series focusing on the China electronics industry. It is based on field research and in-person interviews conducted by editors and staff writers from Global Sources publications including EE-Times China, ESM-China and Market Intelligence Reports. It draws on China Customs Statistics, and data from the Ministry of Information and
Industry, and other government and industry organizations. The second and third reports examining the communications and computer products manufacturing segments, respectively, will be released in the first half of 2005.

The Consumer Electronics Outlook: China report is available for US$695 and can be ordered online at http://www.globalsources.com/CWP .