SHANGHAI, Mar. 8 -- The revenue of China's integrated-circuit market surpassed 100 billion yuan (US$12.8 billion) for the first time last year.

This represented a tenfold increase compared with 2000, industry officials said yesterday during an IC forum in Shanghai.

Chinese firms should strengthen innovation to provide high-value products and services to keep in line with the rapid growth of the domestic market, government officials and industry experts said.

Chinese IC market revenue reached 100.63 billion yuan in 2006, 43.3 percent growth year-on-year, thanks to the boom in home-grown IC firms on the back of chip design and assembly and testing, according to Beijing-based CCID Consulting, a research firm authorized by the Ministry of Information Industry.

Global sales of semi-conductors reached US$247.7 billion in 2006, an increase of 8.9 percent year-on-year, according to the Semi-conductor Industry Association

"The market will continue to grow, fueled by the surging demand for electronic products," Wei Jun, a senior official at the MII, said during IC Market China 2007. "The government will launch more favorable policies to support Chinese IC firms."

One policy, which contains favorable tax conditions to IC firms, is in the legislation process and scheduled to enacted this year.

"We need more firms with their own patents so they are competitive in the rapid-growing market," said Yu Zhongyu, director of the China Semi-conductor Industry Association.

Actions Semi-conductor Co, a Zhuhai-based multimedia chip designer, said it will focus more on high-margin video chip design from low-end sound chips.

Nasdaq-listed Actions expects chip shipments will jump 30 percent year-on-year in 2007 from 70 million units last year, according to David Lee, Actions' CFO.

"We will strengthen global expansion and grab market shares from Apple Inc in the non-US international market," Lee said.

Shanghai-based Spreadtrum Communication has developed a mobile phone chip for 3G handsets and is expected to float shares for the first time overseas.

Shanghai foundry Semiconductor Manufacturing International Corp's revenue was 11.35 billion yuan in 2006, ranking the No. 1 in IC firms in the Chinese mainland.