EL SEGUNDO, CA - China's slowing electronics industry growth is leading to reduced demand for semiconductors, prompting iSuppli Corp. to trim its revenue forecast for chips sold in China in 2006.
 
iSuppli currently expects China's 2006 semiconductor revenue to rise between 11% and 15%, which translates to $41 billion and $43 billion for the year. That’s down from the firm’s projection of 18% one year ago. According to iSuppli, contributing factors may include a third-quarter decline in revenue in China’s telecom market, and RoHS restriction implementations.
 
By the middle of the second quarter, local OEMs and semiconductor distributors in China began to cancel orders and delay previous semiconductor bookings.
 
China's chip market may be suffering from a lack of a killer application to drive sales, says iSuppli. Semiconductor suppliers have placed their hopes on the Chinese New Year season, and anticipate strong demand for chips for 3G mobile phones, digital TVs and Internet Protocol televisions in late 2006.