HONG KONG -- China's potential as a semiconductor market was illustrated today, as James Morgan, CEO of Applied Materials Inc., stated that the chip-equipment giant expects to generate as much as $500 million in direct sales to China over the next few years.
Morgan was in Hong Kong for the start of trading in Applied Materials shares on the Stock Exchange of Hong Kong (SEHK). Applied is participating in an pilot program to list selected Nasdaq stocks on the SEHK. Other U.S. companies in the venture are Amgen, Cisco, Dell Computer, Intel, Microsoft, and Starbucks Coffee.
Santa Clara, Calif.-based Applied generated somewhat less than 10% of its revenue in the previous quarter in China. However, Morgan said China's pending entry into the World Trade Organization will create more sales opportunities as semiconductor makers set up new plants there to meet demand for devices such as computers, mobile phones and Internet-related equipment.
"I think it'll grow 500% over the next few years," from its current annual China sales rate of $50 million-to-$100 million per year, Morgan told Reuters in an interview here. "That should go to a half billion dollars a year or more," he added.
China could become the world's second-largest semicondictor market by the end of this decade, according to one market research company (see Feb. 24 story).
Applied Materials shares are currently trading on the SEHK at HK$686, or about $85. Its stock code on the SEHK is 4336.