Lee: China Seeks Equipment Development
David Lammers, News Editor -- Semiconductor International, 3/24/2008
China is working to further develop its domestic abilities to supply semiconductor production equipment and materials, said William Lee, vice president of sales and marketing at Semiconductor Manufacturing International Corp. (SMIC, Shanghai).
In a follow-up exchange after his keynote speech at SEMICON China in Shanghai last week, Lee said China’s 2007 IC imports of $71.3B were almost identical with the country’s oil import bill last year. With its domestic market set to account for ~38% of worldwide chip demand in 2010 — worth $124B according to IC Insights (Scottsdale, Ariz.) — China’s ability to supply its domestic chip market is an important issue facing the country. This year, China will consume ~$90.2B in ICs, and domestic production will account for only $6.5B of that. By 2010, when consumption reaches $124B, domestic sources will meet ~$12.1B.
| The gap between China's domestic IC consumption and domestic production is expected to widen to $111B in 2010. |
“At present, as a top electronics production country, China meets less than 10% of its own IC demand. This demand-supply gap is projected to continue to widen to over $111B by 2010,” Lee said, citing data from the China Center for Information Industry Development (CCID), iSuppli (El Segundo, Calif.) and IC Insights.
At the same time, China’s IC design industry is growing fast, from ~$3B last year to roughly ~$6.4B in 2009, as China’s design firms are getting better support from systems companies and IC foundries within China. Also, Lee said demand from emerging applications, such as digital television, smart phones, and MP3 players, are supporting design activities, many of them targeted at leading-edge 90 and 65 nm process technologies.
“China has a solid foundation in place, including a full semiconductor supply chain, manufacturing capacity, strong engineering skills, and a sizeable domestic market. The next phase will be marked by an emphasis on research and development. R&D is what is needed to continue the ongoing development of China’s IC industry,” Lee said.
China’s Eleventh Five-Year Plan calls for improving the fundamental R&D capabilities of the IC industry, including building a complete IC industry supply chain, establishing industrial policies, and promoting industrial collaboration.
| China's latest five-year plan supports R&D for domestic equipment and materials production. |
China needs to foster the IDM model, Lee said, and encourage the establishment of both advanced front-end manufacturing and back-end packaging and test capabilities. A priority must be placed on IC design, as well as fostering R&D of key chip equipment and materials.
In the next five years, Lee said that China intends “to close the gap to be one of the most competitive vendors in 6 in. and 8 in. wafer equipment to realize production of 8 in. photolithography tools, and to have a major breakthrough in R&D in the 12 in. arena in order to accelerate the development of leading-edge process technology.”
He said some local companies in China can provide tools for 90 nm processes. Start-up equipment companies are also emerging. For materials, China is moving toward self sufficiency, with China-based quartz suppliers providing about 80% of needs. SMIC purchases NF3 from local sources, and is evaluating local supplies of other chemicals, including H2O2 and H2SO4.
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