China became the world's third largest market for semiconductors last year as Chinese users snapped up more computers and mobile phones, market researcher IDC said.
The world's most populous nation consumed $US26.1 billion worth of semiconductors last year, 39 per cent more than 2003, when its market was valued at $US18.8 billion, IDC said.
The company did not include chips re-exported by Chinese factories in its figures.
"The country's semiconductor market has grown from a meager $US2 billion during the 1990s to become the third largest consumer of semiconductors worldwide," IDC said.
Computing led the way for China in terms of chip consumption, including personal computers, laptops, and servers, a research manager at IDC, Betty Lin, said.
The country's communications sector only devoured about a quarter as many chips as the computing segment, she said.
In 2005, IDC expects China's semiconductor market to grow 8 per cent to $US28.3 billion.
"China will continue to grow at twice the pace of the entire semiconductor industry over the next five years," Lin said.
China's chipmaking industry gained market share last year, mainly due to strong government encouragement, IDC said.
Current policies had encouraged more than $US9.3 billion in chip-related capital investments in China since the year 2000, and an additional $US4.5 billion of investments was expected this year, IDC said.
Chinese chip suppliers took a 12 per cent share of the contract semiconductor manufacturing market last year, up from 7 per cent in 2003, according to IDC.
Shanghai-based Semiconductor Manufacturing International had over a 6 per cent global share of the chip foundry revenue last year, IDC said.