According to China's SICA (Shanghai Integrated Circuit Industry Association), the Chinese IC (Integrated Circuit) market will grow 32.1% in 2006 and 33.6% in 2007, with a CAGR (Compound Annual Growth Rate) of 28.9% from 2005 to 2010. SICA stated that the strong growth is due to the high penetration of digital consumer products, 3G networks, notebook PCs, and desktop PCs, coupled with increased demand for flat-panel TVs. In addition, shipment share of IC design and IC manufacturing sectors are estimated to increase to 18.8% and 39.4%, respectively, and the packaging sector to decline from 49.1% to 41.6%.

SICA also stated that the global IC industry will continue to concentrate in China within five to ten years, with Shanghai becoming the major IC hub. The total shipment value of Shanghai's IC industry is expected to hit 40 billion RMB (US$5 billion; US$1 = 7.97 RMB) in 2006, up 31.94% year-on-year. Packaging, IC manufacturing, IC design, and equipment material are projected to account for 46%, 41.5%, 6%, and 6.5% of the total shipment in Shanghai.