Dorothy Lai, a senior semiconductor analyst with the market research firm, predicted that China's demand for semiconductor will reach 10.9 billion this year and 12.5 billion in 2003. Said Lai, the Document No. 18 issued by the Chinese Government last year which encouraged the development of software and semiconductor industries with low tax rates and other preferential, provided an important incentive to the growth of China's semiconductor industry. (Source: China Daily, Nov. 7, 2002).