San Jose, CA -- Electronics manufacturing in China experienced another year of record growth in 2003, exceeding even optimistic expectations, according to a new report from Electronic Trend Publications. While part of the growth is attributable to a bandwagon effort to keep pace with worldwide competitors who manufacture in China or have CM/ODM partners there, the major trend is for companies to lower product cost by leveraging the outsourcing model and gaining access to the enormous, undeveloped local Chinese market.

ETP estimates the cost of goods sold for electronics products manufactured in China was $122 billion in 2002. The market is predicted to grow at a CAGR of 15.4%, reaching $270 billion by 2008. Some of the fastest growing companies over this period should include TCL, Aucma, AsusTek, Jinling, Quanta, Gree and UTStarcom, all of which saw their revenues double from the previous year.

Computing and communications IT equipment will continue to grow, accounting for nearly 68% of China's total electronics production by 2008. However, the market in all industries is expanding for both domestic consumption and export.

The unanswered question is: How long can this growth be sustained without a downturn? ETP suggests that Asian companies tend to compete themselves into an unhealthy market environment from a supply and profit point of view. Yet, as long as fundamental worldwide demand for products remains strong, China is expected to expand its market share of the worldwide assembly market.