As this report describes, China is rapidly closing the gap on technologies needed for electronics manufacturing. It can be expected that WTO membership combined with more aggressive incentives for foreign direct investment will lead to changes over the next five years that will be significantly greater than those of the past five years. The priorities described in this report will continue and will result in a more competitive business environment. We can summarize the present as follows.

As this report will show, China has access to most of the technologies needed to manufacture today' s products. Companies are already using leading edge manufacturing technologies for assembly that include chip-on-board, chip-on-glass, and chip-scale-packages. While the semiconductor industry lacks the capacity to meet domestic needs, China' s IC design capabilities are competitive in the global marketplace. The design of ASICs for advanced products, like MP3 players and set-top boxes, has been well established. Such ASICs can be manufactured by any number of firms in Taiwan, Singapore, or Japan.

Mainland China represents a huge opportunity for semiconductor manufacturers and equipment and materials suppliers. The emerging semiconductor market will exhibit growth far in excess of any other country in the 2003-2008 time frame. This 260-page report analyzes Mainland China' s semiconductor and equipment industries, examining the technical, economic, and political issues that are shaping this nascent industry.

TABLE OF CONTENTS

Chapter 1 Introduction                                         

1.1   Introduction                                             

Chapter 2 Semiconductor Industry                               

2.1   Introduction                                             
2.2   China's Domestic Semiconductor Market                   
2.3   China's Semiconductor Infrastructure                     
2.4   Government Goals                                         
2.5   Semiconductor Manufacturers In China                      
      2.5.1 China Hua Jing Electronics Group Corporation        
      2.5.2 CSMC Technologies                                   
      2.5.3 Grace Semiconductor Manufacturing                   
      2.5.4 Hangzhou Youwang Electronics                        
      2.5.5 Huayue Microelectronics                             
      2.5.6 Semiconductor Manufacturing Int'l (SMIC)            
      2.5.7 Advanced Semiconductor Manufacturing (ASMC)         
      2.5.8 Fairchild Semiconductor                             
      2.5.9 Huaxia Semiconductor Manufacturing                  
      2.5.10 Mitsubishi-Stone Semiconductor                     
      2.5.11 Shanghai Belling                                   
      2.5.12 Hua Hong NEC Electronics                           
      2.5.13 STMicroelectronics ­ Hynix                         
      2.5.14 Toshiba Semiconductor (Wuxi)                       
      2.5.15 He Jian Technology                                 
      2.5.16 TSMC                                               
      2.5.17 Ningbo Sinomos Semiconductor Incorporated (NSSI)   
      2.5.18 SIM-BCD                                            
      2.5.19 Intel                                             
2.6   Back-End Manufacturing                                   
2.7   Printed Circuit Board (PCB) Manufacturing                
2.8   Microelectronics Industry Equipment                       
2.9    IC Design                                    
2.10   Electronics Components                       
2.11   Role Of Foreign Companies                    
2.12   IC Industry Assessment                       

Chapter 3 Market Analysis                           

3.1    Economic Recovery In Asia                    
3.2    Semiconductor Market                         
3.3    Semiconductor Equipment Market               
3.4    Telecommunications                            
       3.4.1 Wireless                                
       3.4.2 Internet                               
3.5    Computers                                    

Chapter 4 High-Tech Sectors                         

4.1    Introduction                                 
4.2    Telecommunications                            
       4.2.1 China Telecom                           
       4.2.2 China Mobile                           
       4.2.3 Domestic Competition                    
       4.2.4 Foreign Competition                    
4.3    Computers                                     
       4.3.1 Domestic Suppliers                      
       o       Lenovo                                
       o       The China Great Wall Group            
       o       Tontru Information Industrial Group   
       o       Others                                
       4.3.2 Major Foreign Competitors              
4.4    Optoelectronics                              
4.5    Software                                     
4.6    Consumer Electronics                         
4.7    Chemicals                                    
4.8    Environmental Industry                       
4.9    TFT-LCD Technology                            

Chapter 5 High Technology Industry Development Zones              

5.1   Introduction                                                
5.2   Torch Program                                               
5.3   High Technology Industry Development Zones                   
      5.3.1 Anhui Province                                         
      o       Hefei High And New Technology Industry Development Zone                                                 
      5.3.2 Beijing                                                
      o       Beijing Experimental Zone For The Development Of New Technology Industries                            
      o       Changping Park Of Bez                               
      o       Fengtai Park Of Bez                                  
      5.3.3 Fujian Province                                        
      o       Fuzhou Science And Technology Park                   
      o       Xiamen Torch High Technology Industry Development Zone                                                 
      5.3.4 Gansu Province                                         
      o       Lanzhou High And New Technology Industry Development Zone                                     
      5.3.5 Guangdong Province                                    
      o       Foshan High And New Technology Industry Development Zone                                     
      o       Guangzhou Tianhe High And New Technology Industry Development Zone                                     
      o       Huizhou Zhongkai New Technology Industry Development Zone                                     
      o       Shenzhen Science And Technology Industrial Park      
      o       Zhongshan High & New Technology Innovation Service Center                                               
      o       Zhuhai High And New Technology Industry Development Zone                                    
      5.3.6 Guangxi Zhuang Autonomous Region                       
      o       Guilin High And New Technology Industry Development Zone                                               
      o       Nanning New Technology Industry Development Zone
      5.3.7  Guizhou Province                                    
      o        Guiyang Xintian New Technology Industry Development Zone                                                
      5.3.8  Hainan Province                                     
      o        Hainan International Industrial Park                
      5.3.9   Hebei Province                                      
      o        Baoding New Technology Industry Development Zone 
      o        Shijiazhuang High And New Technology Industry Development Zone                                    
      5.3.10   Heilongjiang Province                               
      o        Daqing High And New Technology Industry Development Zone                                    
      o        Harbin High And New Technology Industry Development Zone                                    
      5.3.11   Henan Province                                     
      o        Luoyang High And New Technology Industry Development Zone                                   
      o        Zhengzhou High And New Technology Industry Development Zone                                   
      5.3.12   Hubei Province                                      
      o        Wuhan Donghu New Technology Development Zone        
      o        Xiangfan High And New Technology Industry Development Zone                                   
      5.3.13   Hunan Province                                     
      o        Changsha High And New Technology Industry Development Zone                                   
      o        Zhuzhou High And New Technology Industry Development Zone                                   
      5.3.14   Inner Mongolia Autonomous Region                   
      o        Baotou Rare Earth High And New Technology Industry Development Zone                                    
      5.3.15 Jiangsu Province                                      
      o      Changzhou High And New Technology Industry Development Zone                                      
      o      Nanjing High And New Technology Industry Development Zone                                      
      o      Suzhou High And New Technology Industry Development Zone                                      
      o      Wuxi High And New Technology Industry Development Zone                                                  
      5.3.16 Jiangxi Province                                      
      o      Nanchang High And New Technology Industry Development Zone                                      
      5.3.17 Jilin Province                                        
      o      Changchun High And New Technology Industry Development Zone                                      
      o      Jilin High And New Technology Industry Development Zone                                                  
      5.3.18 Liaoning Province                                     
      o      Anshan High And New Technology Industry Development Zone                                      
      o      Dalian High And New Technology Industrial Park        
      o      Shenyang New-High-Tech Industrial Development Zone    
      5.3.19 Shaanxi Province                                      
      o      Baoji High And New Technology Industry Development Zone                                                  
      o      Xi'an New Technology Industry Development Zone        
      5.3.20 Shandong Province                                     
      o      Ji'nan High And New Technology Industry Development Zone                                                  
      o      Qingdao High-Tech Industrial Park                     
      o      Weifang High And New Technology Industry Development Zone                                      
      o      Zibo High And New Technology Industry Development Zone                                                  
      5.3.21 Shanghai                                                
      o       Incubator Center Of High-Technology Of China Textile International                                          
      o       Shanghai High And New Technology Industry Development Zone                                       
      o       Shanghai Zhangjiang Hi-Tech Park                       
      5.3.22 Shanxi Province                                         
      o       Taoyuan High And New Technology Industry Development Zone                                       
      5.3.23 Sichuan Province                                        
      o       Chengdu High And New Technology Industry Development Zone                                       
      o       Chongqing High And New Technology Industry Development Zone                                       
      o       Mianyang High And New Technology Industry Development Zone                                       
      5.3.24 Tianjin                                                 
      o       Tianjin New Technology Industrial Park                 
      5.3.25 Xinjiang Uygur Autonomous Region                        
      o       Urumqi High And New Technology Industry Development Zone                                       
      5.3.26 Yunnan Province                                         
      o       Kunming High And New Technology Industry Development Zone                                       
      5.3.27 Zhejiang Province                                       
      o       Hangzhou High And New Technology Industry Development Zone                                      
      5.4   Free Trade Zones                                              

Chapter 6 Economic Statistics And Analysis 
                         
6.1   Economic Climate                                              
6.2   GDP                                                           
6.3   Employment Sector                                             
6.4   Inflation                                                     
6.5   Retail Sales                                                  
6.6   Foreign Trade                          
6.7   Rural Spending                         
6.8   Investments                            
6.9   Economic Statistics                    
6.10  National Bureau Of Statistics (NBS)     
       6.10.1 Functions And Responsibilities   
       6.10.2 Leadership                       
       6.10.3 Internal Setup                   
       6.10.4 Overview                        

Chapter 7 Domestic Private Sector Issues      

7.1    Economic Transformation                
7.2    Private Sector Dynamics                
7.3    Shift Of Government Policy             
7.4    Private Sector Financing               
7.5    New Rules Under The WTO                

Chapter 8 Foreign Investment                  

8.1    Foreign Direct Investment              
8.2    Turnaround                             
8.3    WTO Pledges                            
8.4    Can China Be Trusted                   
8.5    Venture Capitalists                    
8.6    Sino-Japanese Trade                    

Chapter 9 Political Issues                    

9.1    China's Foreign Policy                  
       9.1.1 National Sovereignty              
       9.1.2 Opposing Superpowers             
       9.1.3 Peaceful Coexistence              
       9.1.4 Strengthening Solidarity                                         
       9.1.5 Relations With Developed Countries   
       9.1.6 Promoting China's Reunification     
9.2   One Country, Two Systems                  
9.3   China-Taiwan Relations                     


LIST OF FIGURES                                                             

3.1    China's GDP -- 1980-2009                              
3.2    China's IC Production -- 1995-2009                    
3.3    China's IC Consumption -- 1995-2009                   
3.4    China's IC Production/Consumption Ratio -- 1995-2009  
3.5    China's IC Import Requirements -- 1995-2009           
3.6    China's IC Supply/Demand -- 1995-2009                 
3.7    China's IC Fab Capacity ­ 2000-2009                   
3.8    China's IC Applications -- 2009                       
3.9    Semiconductor Equipment Forecast                      
3.10   Semiconductor Equipment Market Shares -- 2009         
3.11   China's Revenue of Telecom Services ­ 1999-2009       
3.12   China's Mobile and Fixed Line Subscribers ­2009       
3.13   Cellular Subscribers In China And Asia                
3.14   China's Cellphone Market -- 1996-2009                 
3.15   China's Internet Users -- 1996 - 2009                 
3.16   China's PC Market -- 1992-2009                        
4.1    Materials Forecast By Region                          
5.1    Map Of Regions Of China                               
6.1    China's GDP Growth                                    
7.1    Percentage Of Private Sector Industrial Output        
7.2    Employment Growth Rates By Type Of Employer           
7.3    Sources Of Finance By Company Size                    
7.4    Banking Constraints By Company Size                   
8.1    Direct Foreign Investment -- 1985-2009                
9.1    Taiwan's Jobless Rate                                  

LIST OF TABLES
                                                                  
2.1   Chinese IC Fab Construction 2004-2009                       
2.2   Chinese Foundry Construction 2004-2009                      
2.3   IC Technology Development In China                          
2.4   Major Packaging And Testing Companies In China              
2.5   China IC Packaging And Testing Firms: Joint                 
2.6   China IC Packaging And Testing Firms: Wholly-Owned Taiwan Firms                                                
2.7   China IC Packaging And Testing Firms: Locally-Owned Firms   
2.8   China fabless IC design firms                               
2.9   Main Pure-Play Foundry Revenues In China 2007-2009          
4.1   China's Leading Export/Import Partners For High-Technology Products - 2008                                             
4.2   Main Software Parks In China                                
4.3   China's Consumer Electronics Production                     
5.1   National High Technology Industry Development Zones         
6.1   Major Economic Indicators 2008-2013                         
8.1   Foreign Direct Investment In China By Enterprise            
8.2   Top Ten Foreign Investors In China - 2009                   
8.3   Foreign Direct Investment By Destination                    
8.4   Direct U.S. Foreign Investment -- 1979-2008                 
8.5   Top Venture Capitalists ­ 2008