I General Situation of the Development of Foshan Electronic Information Industry.
1.Pearl River Delta is the core area of China’s electronic information industry.
Since the 1990s, China electronic information industry has maintained a rapid and persistent growth, with industry scale expanding and growth rate ranking first in all sectors. The annual average growth rate of the industry output value was over 30% from 1990-2005, almost three times of the annual average GDP growth rate.
China has become the largest manufacturers of electronic products in the world. The sales revenue accounted for over 15% in the global market in 2005. A number of American, Japanese and Taiwan enterprises set up their factories in China mainland in order to efficiently decrease the production cost.
The gross output of Guangdong electronic information industry accounts for 1/3 nationwide, and the enterprises are mainly situated in Pearl River Delta. The hi-tech industrial scale in PRD area takes up 94% in Guangdong and the industry in PRD is concentrated and has formed established industrial chain.
2. Foshan is the key manufacturing base of Guangdong electronic information industry.
Foshan is the core member of PRD city cluster and electronic information industry is the pillar industry of Foshan. The growth rate of output value ,sales revenue and export revenue of the industry in Foshan from 2001-2006 was over 20%, accounting for 24% in Foshan GDP compared to the original 14%.The output value in 2006 was 158 billion Yuan ,increasing by 25.6%.
Foshan electronic information industry covers the six fields in terms of product structure, such as computer commnunications,electronic components, optical data storage, consumption electronic products, auto electronics and software, and there are altogether more than 1800 varieties.Foshan has developed dozens of well-known and competitive enterprises , such as Chigo Air-Conditioner,Shunde Computer Corporation, Guangdong Nortel Communications Equipment, Nationstar Optoelectronics, Blue Rocket,Midea and Galanz.
Foshan possesses the most advanced household appliance industry in China. Foshan electronic information industry mainly focus on electronic product manufacturing in terms of industrial structure and the output value of household appliances accounts for over 60% in the whole industry.
Foshan household appliance industry ranks in the forefront in the whole country in the aspects of industry scale, product quality, and the construction of industrial chain as well as the well established market system. Foshan is the important household appliance manufacturing and export base in China and even in the world. The output of household appliance accounts for 60% in Guangdong and microwave ovens 48.6% in China. A large number of household appliances, such as fridges,air-conditioners and cameras are made in Foshan.The industrial pattern takes shape with dozens of giant manufacturers as the center, such as Midea, Galanz, Vanward, Macro,Canbo, Chigo, and a lot of small and medium size enterprises home and abroad providing supporting services. The matching rate of local spare parts reached 90%, and purchasing cost dropped by 2% annually, forming the relatively complete industrial chain.
II Development Planning
Foshan gives priority to the development of electronic information industry and it has been listed as the key development industry. According to the national industry distribution pattern and Foshan electronic information industry foundation, Foshan has established industry development zones according to different industries and now it presents a trend of industry concentration.
In 1999, Nanhai Software Science and Technology Park, one of the four largest software parks in Guangdong, was set up.
In 2004, Foshan electronic information industry was included into “National Electronic Information Industry Base” and under unified management.
In March, 2006, Foshan was awarded “National Electronic Information Industry Base”, and National (Foshan) Display Devices Industrial Park was inaugurated.
Foshan focuses on the development of fluid crystal display devices, auto electronics and information home appliances. Besides the steady growth of traditional household appliances, Foshan display devices and auto electronic industries have a great market potential and enjoy a rapid growth, gradually becoming the key economic growth point.
1 TFT-LCD－TV:
1.1 Great prospect for the development of liquid crystal TV industry.
The rapid growth of China economy, great market demand and advantage of production cost enable China to become the largest manufacturing base of TVs, PC displays and notebook computers in the world. And there is a great market demand for TFT-LCD displays.
China has become the major manufacturing and export country of color TVs. The output has reached over 74 million, which accounts for 40% in global export.
China’s color TV industry has a gradual transition from CRT to flat panel display and finds their ways into common families. Display Search estimated that the demand for liquid crystal TV would increase at a compound growth rate of 126.1% from 2005-2007 and the sales of liquid crystal TV would surpass that of CRT in 2006, and there would be over 70% of CRTs in the world in 2008.As the price of liquid crystal TV goes down, the prospect of the industry would be better.
Japanese, Korean and Taiwan panel manufacturers are strengthening their efforts in making investments in TFT-LCD back-end module. The number of LCD processed and manufactured in mainland China accounts for 60%-70% in the world.
1.2 There is a concentration of the downstream industry of liquid crystal in PRD area, so the developmental potential for the upstream industry is quite large.
TV output in PRD area accounts for 47% in China (including CRT and liquid crystal TV), and the production of PCs and notebook computers also plays an important role in the world. Last year, the liquid crystal display panels imported in Guangdong was over 1 billion in number and worth 8.5 billion dollars.
There are only two enterprises investing in PRD area, one is Taiwan Innolux investing in Shenzhen and the other is Display Qimei Optoelectronics in Nanhai, which fall far short of the demand of downstream market. The TFT-LCD industry in PRD will have a rapid development in the future.
1.3 Advantages of developing TFT-LCD project
Policy support: in Dec.2005, People’s Government of Guangdong Province decided to place the project TFT-LCD which was included in Guangdong key industry development planning in Foshan. The initial phase focuses on the construction of module and the final objective is to form the scale TFT-LCD industrial chain and world-class TFT-LCD industrial base.
In order to enhance the development of TFT-LCD project, Foshan set up an area of 2 km2 in Nanhai as display device industrial park and is planning to introduce the leading enterprises of liquid crystal flat panel. With the professional parks as the platform, the display device industrial chain that is well-structured and has good supporting function is gradually made. Double circuit power supply is offered to the key projects to ensure the security and reliability of power supply.

Six advantages of Foshan liquid display device industry are:
1 supported by national display device industrial park
2 solid electronic information industry foundations
3 good talent support from sufficient human resource
4 abundant land resources and strong local economic strength
5 efficient logistic network and customs clearance, and the opening of E-port forms the modern commerce circulation system radiating out domestically and globally.
6 Support from efficient government and standardized practice.

LCM module project put into production. In April,2006, Taiwan Qimei electronics corporation ,world’s fourth largest liquid crystal display and second largest liquid crystal display panel manufacturers, signed a contract in making investment in LCM module project in Foshan Nanhai, with total planning investment of $480million ,producing liquid crystal TV module, and annual productive capacity of 9.6 million display modules.
LCM is a module that assembles the liquid crystal parts, connecting fitting, integrate circuit, circuit board, backlight, components .The entry of the project laid a solid foundation for the special area of Foshan liquid crystal TV industry.
1.4 Orientation of Key Projects to be introduced
TFT-LCD industry involves the fields of optics, semiconductor, electrical machinery, chemistry engineering, materials, and is of extensive technical level and obvious division in fields.
Foshan gives priority to the development of the following areas: glass base plate, ITO electricity conduction glass, liquid crystal materials, integrate circuit, color filter, backlight module, polarizer, driving IC, control IC.
2 Auto Electronics:
1.1 Unique Advantages in Investing in Auto Parts in Foshan.
There were 550 thousand cars produced in Guangzhou in 2006, ranking second in China and output value of 116.223 billion Yuan, and export value $784 million. It is estimated that the annual productive capacity of whole cars will reach 1.3 million in 2010 and output value of 200 billion Yuan and output value of auto parts of 100 billion Yuan. Guangzhou will become one of the major auto manufacturing bases in the world.
The great market potential demand brings prosperity to the auto parts manufacturers. By the end of 2006, the number of China civilian cars was over 38 million, among which the private cars was nearly 22 million. Guangdong ranked first nationwide in the number of cars and the private cars accounted for 1/3 in China. Pearl River Delta, with Guangzhou as the center, is China’s largest auto consumer market, accounting for 1/4 in the whole country, which is the important market foundation for the development of Guangzhou auto industry.
Foshan has excellent geographic location and competitive cost advantage in investing in auto parts industry.Foshan industrial parks is within one hour’s drive to the three whole car bases of Guangzhou-Toyota, Honda and Nissan. Surrounding the three bases, professional industrial parks with improved service function are formed to effectively decrease the investment cost.
Currently, there are almost 300 auto parts manufacturers, among which there are 107 foreign funded ones, with total investment amount of nearly $1 billion. And a number of auto parts suppliers, such as Toyota, Honda, have settled down in Foshan.
1.2 Auto electronic is the key development direction for auto technology and electronic industry.
As the most important means of transportation in the modern society, the modern automobiles are developed in the directions of communications, security, comfort, environment and happiness. With the strengthening awareness of environmental protection, the auto electronization is keeping been upgraded. The traditional mechanical system is gradually placed by electronic technology.
Auto electronization is considered as one revolution in the process of the development of auto technology. The degree of auto electronization is regarded as the important gauge to measure the modern automobiles and the most important technical measures to develop new auto style and to improve the auto performance. The authoritative experts estimated that 70%-80% of the future development of auto industry would come from auto electronics.
1.3 Two kinds of auto electronic product manufacturers will be introduced.
One is the auto electronic control equipment. Auto electronic control equipments go hand in hand with auto mechanical system that is the auto electronic equipment combining the machinery and electronics. The products include: engine, chassis, vehicle body electronic control, such as electronic fuel injection system, antilock brake control, anti-skid control, tractive force control, electronic controlled suspension, electronically control gearbox and electrical power steering. The other one is the car electronic equipment, which can be used independently in the car, including car information system, navigation system, acoustics, TV entertainment system, car telecommunications system and equipment for surfing the internet.
1.4 Other Important Auto Parts.
Important parts such as chassis,engine,gearbox, clutch, brake stuff,redirector,suspension system, tail gas purifying equipment, large size auto pressing parts, injection molding, auto bearing
Spare parts such as engine parts, alloy wheel hub, car fasteners, auto supplies, and auto decorations and supporting products.
III Information Home Appliance and Embedded Software.
The scale of Foshan household appliance industry, output and product quality are in a leading position, and Foshan is the most important household appliance industry base in China. There are dozens of major enterprises with output value of over 1 billion Yuan, such as Midea, Kelon, Galanz, Sampo, Shell Electric, and Chigo.
Foshan gives full play to the basic advantages of household appliance industry, and focus on digital, smart and individual products which can exchange information through network. The products include series of household network appliances, such as smart phones, digital TV and embedded household appliances and household digital products such as portable communications and network equipment, terminal products of wired broad band network, broad band wireless access terminal, household exclusive use network system and terminal, smart construction terminal.
By the end of 2006, there were more than 200 software enterprises in Foshan, with operating income of 4.4billion Yuan.Foshan gives priority to the development of embedded software products, such as embedded smart household appliance controller and system, media system and auto navigation system.

Plastics Manufacturing Industry

Metal Die

According to association’s Stat.: (Pie Charts)
* Outputs of aluminum material for building in Foshan account for 60% of that in Guangdong and accounts for 40% of that in China
* Outputs of stainless steel products in Foshan account for 35%, among which, the outputs of stainless steel tube account for 80% of that in China.
* Outputs of hardware products account for 40% or above of that in Guangdong and accounts for 20% or above of that in China.