Compiled by Mark DeSorbo
Cha-ching for China
BEIJING—China's economy grew a surprising 9.9 percent in the final quarter of last year, the country's National Bureau of Statistics reported in late January, signaling a quick recovery from SARS-induced economic fallout and foreshadowing a favorable outlook for this year.
Investment and foreign trade helped drive the country's annual gross domestic product growth to 9.1 percent, according to the official figures released by the bureau.
At $1.4 trillion (11.7 trillion yuan), full-year GDP growth was the highest since 1997, Li Deshui, the bureau's commissioner said at a January 20 press conference.
“It was a hard-won, successful achievement, after the outbreak of the SARS epidemic and frequent natural disasters,” Li says, adding that he and other officials are pleased to see rapid economic growth, a stable consumer price index and improvement in employment.
Economic growth is China's main goal, and it has pledged to its citizens fast development and increasing living standards.
The full-year GDP rise exceeded market consensus, and was much higher than the 8.5 percent predicted by Xie Xuren, China's State Taxation Administration commissioner.
For this year, Li projected at least 7 percent growth, with a lively first quarter backed by continued investment. He also said consumer demand will be stronger, while export growth was likely to slow.
The pounding China received from severe acute respiratory syndrome (SARS) last spring kept people and investors away for months, and caused equally rampant worry of long-term economic hardship.
The strong fourth quarter and full-year GDP growth may raise further concerns that China's economy may be overheating. Li, however, explained that while some “select regions and select sectors” may be showing signs of overheating, the overall picture is sound.
TAIPEI—An ongoing analog chip shortage and strong demand before the Chinese New Year holidays have led to more fake analog chips showing up in China, according to anonymous sources at Taiwan-based analog IC design companies.
According to sources, the fake chips —designed by small Chinese IC design companies and manufactured at 4- and 6-inch fabs—are passed off as power management (PWM) ICs and metal-oxide semiconductor field effect transistors (MOSFETs) made by international or Taiwanese companies for use in consumer electronics.
The counterfeit chips are priced 10 to 20 percent lower than their genuine counterparts, sources said. The fake chips reportedly have wrecked some Chinese-made consumer electronics products. Some Taiwan-based IC design companies have been wrongfully accused by the Chinese consumer electronics makers and plan to take legal actions against the counterfeiters, sources said.
Safeguarding their intellectual property (IP) has been the major concern for companies that are considering outsourcing production to the Chinese foundries, sources said.
TAIWAN—Government officials are looking for a boost to the nation's economic strength from increased private investment as it projects private investment will jump by around 20 percent this year.
“Taiwan's private investment is expected to increase to about $25 billion this year, buoyed by a strong economic recovery at home and abroad,” said Minister of Economic Affairs, Lin Yi-fu , at a recent press conference.
Consumer and business confidence was shaken by the outbreak of SARS and the uncertainty surrounding the war in Iraq during the first half of last year. A slump in private investment and consumption last year hampered the nation's economy, as measured by GDP growth, said Lin Jin-lung, a research fellow at Academia Sinica.
The SARS outbreak kept most consumers at home and resulted in negative economic growth of 0.08 percent during the April to June period, according to Directorate General of Budget, Accounting and Statistics' (DGBAS) data. But the nation's economy began to regain its footing in the second half, following the recovery of the world economy, and especially the solid recovery in the U.S. As a result, investment by both local companies and multinational firms in Taiwan amounted to some $21.3 billion for the whole of last year, after local businesses felt confident about investing in new plants and equipment.
Matsushita throws down $1.2 billion for new fab
UOZU, Japan—Matsushita Electric Industrial Co. Ltd., best known for its Panasonic brand, is investing $1.2 billion to build a new semiconductor facility aimed at making chips for DVDs, digital TVs, mobile communications equipment, memory cards and network-related equipment.
Officials say that construction is set to begin in May with production aimed for the end of 2005. The new facility will be located at its Uozu plant in the Toyama Prefecture of Japan, the company said.
The facility will be equipped with a 90-nm production process for 300-mm wafers, with plans to eventually upgrade the production processes to 65-nm. The latter number refers to the smallest gap or feature that can be created on a chip. While most commercial semiconductor plants currently use advanced 90-nm processing, by upgrading to 65-nm processes, the company will be able to make the chips physically smaller. This allows more chips to be made from each wafer, increasing production efficiency. Additionally, smaller chips meet demand for smaller electronic products.
The facility will eventually have a capacity of 7,500 wafers a month, Matsushita said. Investment in the expanded production of advanced system LSI (large scale integrated circuit) chips meets with its goal of targeting the digital home electronics market, the company said.
REPORT: '04 will be banner year for China chip making
SHANGHAI—Driven by the recovery of the global semiconductor market and soaring demand from domestic electronics manufacturers, China's semiconductor foundry industry grew rapidly in 2003, setting the stage for the country to play a bigger role in the global chip-making business this year and beyond.
China's semiconductor foundries achieved a total monthly production capacity of more than 100,000 wafers in 2003. Four Chinese foundries are now making products on 8-inch wafers, with two others planning to start this year. The combined capacity of these fabs will exceed 170,000 wafers per month by the end of the year, according to a report from iSuppli, a research marketing firm based in El Segundo, Calif.
The expansion of the global wafer industry is dominated by growth in Asia, and China is the fastest growing country in the region. China's share of worldwide wafer capacity will grow to 9 percent in 2007, up from 4 percent in 2003, iSuppli predicts.
The major factor behind the rise of China's foundries is the unfolding recovery in the worldwide semiconductor industry. Following estimated growth of 13.9 percent in 2003, global semiconductor revenue will rise to $208.8 billion in 2004, up 17 percent from $178.4 billion in 2003, according to iSuppli.
Meanwhile, the amount of semiconductor manufacturing that integrated device manufacturers (IDMs) outsource to foundry providers will continue to rise this year. iSuppli predicts the worldwide foundry business will swell to $14 billion this year, up 22 percent from 2003.
Chinese foundries still cannot compete effectively with their leading international competitors, either in production volume or manufacturing technology. But the immense potential domestic market is a major enticement for IDMs to outsource portions of their manufacturing to Chinese foundries.
China's foundry growth this year will be propelled by orders for chips used in mobile phones, PCs and automotive electronics. Production of all these products is booming in China.
Growth in China's foundry market is being led by the country's major 8-inch wafer manufacturers, all of which plan to increase their production capacity this year. Semiconductor Manufacturing International Corp. (SMIC) operates three 8-inch fabs in Shanghai that have a combined production capacity of 60,000 wafers per month. SMIC expects production capacity at its Shanghai facilities to reach 85,000 wafers per month by the fourth quarter.
In December, SMIC acquired Motorola's 8-inch fab in Tianjin. SMIC intends to transfer its older CMOS technology to the Motorola fab, while focusing its Fab 1 and Fab 2 facilities in Shanghai on advanced technologies.