China Features as Economic Savior
Aaron Hand, Managing Editor -- Semiconductor International, 9/1/2002
The prevailing topic of conversation at SEMICON West last year was the sluggish economy combined with a cyclical downturn in the semiconductor industry. When this year's show came around again, and the economy was still in miserable shape, it wasn't likely that discussions would turn to the same old dismal topic. We needed something new for our panel discussions and booth chats.
So the industry has turned to the one theme that is actually offering some hope: China. You couldn't swing a financial spreadsheet at this year's SEMICON West without hitting somebody talking about China's burgeoning high-tech market, its capabilities as a chip manufacturer, and its soon-to-be insatiable demand for technology.
China's billion-plus population has long offered promise for low-cost manufacturing with built-in demand. But the past several months have seen a significant burst of announcements regarding new joint ventures in the country, new fabs, and the growing visibility of China's top foundries, Semiconductor Manufacturing International Co. (SMIC, Beijing) and Grace Semiconductor Manufacturing Corp. (Shanghai). The push to set up operations in China has become particularly fervent since China finally gained membership in the World Trade Organization (WTO) last December.
And it's no wonder. China is on a path to become the world's largest semiconductor consumer by perhaps 2010, expected to account for 12.2% of worldwide chip sales by 2005, according to research from Converge Inc. (see Semiconductor International , March 2002). By 2005, it's predicted that one-third of the world's OEM activities will be done in China. As one of only a few nations to sustain positive economic growth last year, China's economy is growing at 7% annually. The country's electronics industry, meanwhile, is growing at a rate of ~20% a year. Eight foundry lines are under construction, and an additional 20 are planned across the country for construction within the next 10 years.
Although Taiwan dominates the global foundry business, with TSMC and UMC leading the pack, China's foundries present a considerable threat (see "Taiwan Captures Industry's Attention"). However, China still faces limitations in its acquisition of state-of-the-art technology, legislatively imposed by investing countries.
Of course, the clamor for prospects in China hasn't gone unnoticed by our offices. In fact, Semiconductor International contributed to the noise being made this year at SEMICON West. For its 20th annual industry event, SI invited top officials from prominent players in China's growing semiconductor industry to discuss their experiences in that country. Panel members from SMIC, Applied Materials, Tokyo Electron, Axcelis and Photronics detailed their efforts in growing a China-based business — opportunities and challenges alike (see "Executives Discuss Promise and Pitfalls of Doing Business in China").
At that event, SI's publisher Reed Electronics Group also announced its launch of a new publication to address China's electronics manufacturing industry. Written for Chinese readers, Electronics Manufacturing China will be the first magazine dedicated to the industry when it is launched in November. EM China draws on eight years of direct publishing experience in China — gained through EDN China, Reed's design-focused magazine launched in 1994. Focused on electronics manufacturing engineering and management, the new bimonthly magazine also draws from solid resources in the Reed Electronics Group, using SI, Electronic Packaging & Production, and Test & Measurement World as primary sources of editorial.
In years to come, China will undoubtedly continue to figure more prominently in international semiconductor manufacturing news. Look for more on this front from Semiconductor International and Reed Electronics Group.
