Production of electronic equipment in China is expected to slow in the coming years even though manufacturing will continue to grow and the outsourcing trend will persist, , according to the latest data from iSuppli Corp.

The vast size of China’s electronics industry is making it harder to achieve the kind of high growth margins previously attainable, the El Segundo, Calif.-based firm reported.

China’s production of electronic equipment is predicted to reach $326.2 billion by 2009, rising at a compound annual growth rate (CAGR) of 9.4 percent from $208.2 billion in 2004.

And while this growth is impressive, iSuppli notes, the expansion of China’s production is cooling off compared to the customary high double-digit advances the market has achieved in recent years.

After increasing by 14.6 percent in 2004, production is expected to grow by 11.9 percent this year, 10.6 percent in 2006, 9.5 percent in 2007, 7.4 percent in 2008 and 7.7 percent in 2009.

Despite shrinking margins, electronic equipment production in China is still predicted to rise by an average of nearly $24 billion per year from 2005 to 2009, iSuppli says.

Further, China’s semiconductor consumption will rise to $87.9 billion in 2009, expanding at a CAGR of 12.6 percent from $48.5 billion in 2004, the firm concluded.