PNTR opens contamination control market, but poses infrastructure challenges
08/01/2000
Neil Savage
MOUNTAIN VIEW, CA—The approval of permanent normalized trade relations (PNTR) with China will give manufacturers who use cleanrooms a huge new supply of labor, but it may take some time for the country's skill level and infrastructure to reach industry standards, experts say.
At press time, the Senate was expected to vote on PNTR by late July, with passage almost certain. The House of Representatives approved the bill in May.
"I don't think anything momentous will happen anytime soon," says Ken Goldstein, president of Cleanroom Consultants (Scottsdale, AZ). "I don't see any major changes there because cleanrooms are used in industries that are high-tech and advanced and take a long time to develop."
 Goldstein |
Goldstein: China is likely to be most attractive to the semiconductor and pharmaceutical industries.
China is likely to be most attractive to the semiconductor and pharmaceutical manufacturing industries, Goldstein says. But the infrastructure and skilled labor those industries require are not in place yet, and may not be for quite some time. How long they take to develop will depend in large part on how fast the Communist government is willing to move toward a market economy, he says.
Semiconductor manufacturers applauded House approval of PNTR. Semiconductor Equipment and Materials International (Mountain View, CA) reports that the Chinese market for semiconductor tools is $1 billion this year and should rise to $4 billion by 2003. The Semiconductor Industry Association (San Jose, CA) projects that China will become the world's third-largest semiconductor market within a year, and the second by 2010.
George Olear, director of mechanical/ environmental testing at Contech Research (Attleboro, MA) worries that US companies that move manufacturing operations to China will find an inexpensive but unskilled work force, the same problem that beset companies that moved to Mexico in the wake of the North American Free Trade Agreement. He sees PNTR as a mixed blessing.
"It's going to open up a lot of trade because you may see a flood of semiconductor manufacturers open up fabs over there, because labor is cheap," he says. "I think all American industry will benefit from it from the standpoint that it's going to open up business, but I think it's going to hurt the American worker."
Michael Balestri, senior account manager at Prudential Cleanroom Services (Irvine, CA) agrees that the lure of China's considerable manpower will benefit manufacturers. But other issues will have to be addressed. The raw wafer stock that semiconductor fabs would need would have to be imported from Europe, Japan and Korea, for instance. And there's the question of whether the government could guarantee the protection of intellectual property in the technology transfers that would need to take place.
The question for the Chinese, Balestri says, will be: "Are you ready to become a working, fluid, contributing member of the world society?"