EL SEGUNDO, CA – China’s semiconductor purchases will rise 12% this year to $58 billion after growing 15% last year, according to iSuppli Corp.

Semiconductor growth is on the upswing there because of strong demand from industrial control, security and surveillance systems, automotive and communications equipment manufacturers, says iSuppli.

Shipments of domestically designed cellphones reached 204 million units in 2007, up 58% year-over-year. Similar growth is expected in 2008, says the research firm.

EMS providers and ODMs continued to drive shipment growth through electronics equipment orders outsourced to China.

Shipments of consumer electronics products recorded stable unit growth during the first three quarters of 2007 compared to the same period in 2006. Unit shipment growth of digital set-top boxes and digital still cameras exceeded 30% in 2007. Despite strong demand, chip prices fell dramatically on heightened competition, iSuppli says.

In 2008, buyers in China can expect more price competition. Buyers can expect chipmakers to boost new product development efforts and try to strengthen and build partnerships with OEMs and EMS customers, confirms iSuppli.

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