Update from China: Taiwan talent builds entrepreneurial foundries
01/01/2002
Who would have thought it only a few months ago? China seems to be growing an entrepreneurial semiconductor foundry industry thanks to the success of an aggressive drive to recruit industry talent from Taiwan.
"I've been around this industry since the '80s, and people have always been saying that China would be the next big thing," said George Burns of Strategic Marketing Associates. "But now it finally may be."
After a recent trip visiting fabs around China, he figures Chinese companies are investing some $880 million this year on semiconductor production, and have specific plans on track to increase that by 70%, to $1.5 billion, in 2002.
 |
"I was really struck by the entrepreneurial energy of the new foundries in Shanghai," Burns told Solid State Technology. "It was like the first time I went to Hsinchu, in Taiwan, back in '86 and '87, with exciting startups. This is something new that the state-owned enterprises don't have, something that Taiwan can offer."
Most of that investment and energy comes from two competing Chinese foundries that were started without government funding: Semiconductor Manufacturing International Corp. (SMIC) and Grace Semiconductor Manufacturing Corp., both building $1.5-1.6 billion 0.25µm fabs in the Pudong area of Shanghai. Both are heavily recruiting talent from Taiwan and to a lesser degree from Singapore.
"Engineers are moving to Shanghai," said Burns. "It's a really significant source of capital and management, the equivalent of the Chinese return from the US to Taiwan that helped build Taiwan's industry."
SMIC has built a village to entice engineers and managers from Taiwan, with apartments and a K-12 international school. Grace plans to do the same to create its own society for expatriates. Burns noted that many, perhaps most, of the engineers at these companies seem to be from Hsinchu Science-Based Industrial Park. "They see it as a big personal opportunity, a new frontier," he said.
Both foundries do appear to be using the Japanese technology: Grace from Oki, SMIC from Toshiba.
Burns also noted that everything happening seems to be in Shanghai. "The difference between Beijing and Shanghai was just amazing," he said. In Beijing, contrary to published reports, neither Huaxia Semiconductor Manufacturing Corp. (HSMC) nor Beijing Sinotron (formerly known as Xunchung) has yet to break ground on planned new fabs. NEC also seemed to be pulling resources away from Shougang-NEC near Beijing and concentrating on Shanghai, where its joint venture Shanghai Hua Hong NEC is located.
The government-funded enterprises, which will use lagging technology to fulfill the government plan, are not likely to be a big market for advanced tools. Burns noted managers at many of the fabs he visited, like Shougang and Shanghai Belling, said they were particularly interested in buying used equipment.
Shanghai Hua Hong NEC has the most aggressive plans to move to 0.18µm next year, assuming restrictions on the export of leading-edge equipment are relaxed by then, though SMIC says it will also transition when it can.