Dr. Tzu-Yin Chiu, the CEO and Executive Director of Semiconductor Manufacturing International Corporation, presented the opening keynote at SEMICON China 2012. In a fortunate bit of timing, SMIC said that it has seen an increase in orders, and expects its capacity utilization rate for the first quarter to exceed earlier expectations. SMIC also expects further improvements in the second quarter of this year. This news follows on last week’s announcement from Taiwan Semiconductor Manufacturing Co. (TSMC) that it has raised its first quarter revenue forecast, citing increased orders from customers, especially from the mainland Chinese market.
Dr. Chiu‘s keynote address, “The Opportunities for China IC Industries,” explored China‘s rapidly growing semiconductor industry. Dr. Chiu noted several key growth areas in the growing Chinese economy, and he presented information on emerging opportunities in that market.
The annual SEMICON China show had over 16,000 visitors on its first day, surpassing expectations. In contrast to previous years, this show focused less on outright capital expenditures than on increasing productivity and profit through the current slowdown.
As an example, a presentation by Gang Zou, the general manager of Applied Materials Xi’an presented “Managing Through the Downturn,” in which he noted that today’s lower-than-expected fab utilization rates require extra attention on operational and production flexibility. He noted that in such environments, fab investment focuses more on tactical execution than on strategic positioning.
Also in contrast to previous SEMICON China events, enthusiasm in the secondary equipment market was significantly muted this year. Gary Robertson, general manager 
at KLA-Tencor’s KT Certified division, said that changes in the industry are evident in the secondary equipment market. An excess of used tools are available, and while some fabs – notably MEMS producers and specialty manufacturers – may benefit, overall the secondary market is facing oversupply.
While the SEMICON China 2012 show is widely seen as a success, the industry is working through a challenging time. When Gang Zou noted, “The road ahead will be bumpy, but the future will be bright,” he aptly summed up the overall mood of exhibitors and visitors alike.