China to buy used semiconductor equipment for fabs.
semi.org
This is smart, since buying high priced new equipment results in ROIs around 10% or less UNLESS you are first with a product, which can fill your fab and ramp quickly.
By paying about 25% on the dollar for equipment, it can be possible to get ROIs over 20 - 25%.
Several places - Singapore / Malayasia with Chartered, and South Korea with Hyundai / Hynix, and a number of Europeans, poured huge amounts of money into fabs, only to end up with 'white elephant' money sinks, which they have tried to dump at 50 cents on the dollar, only to get no bids.
*****
Only a few players who can make the bets to stay up with the state of the art -
Toshiba to spend 9 Billion USD on Flash memory fab
physorg.com
*****
The next trick for China is to pick no more than 3 cities, preferably two, to get 80% of the new fabs. These cities will need to be places that well off Chinese and ex-pats will want to live, not just stay for 2-3 years on a project or contract.
So something next to Mongolia will not work.
Hong Kong area, Shanghai, Beijing, and what other places ?
Hanian Island ?
If these fabs are placed in 5 or 8 different regions, it will seriously delay getting to the critical mass need for long term success.
Example : Every piece of equipment will need a visit by a factory maintence/ applications engineer when there is problem.
These troubleshooters are willing to get on a plane an show up within 24 hours.
But that is not what you want - you want enough fabs in an area so the semi equipment companies will base an office there, and the troubleshooter can drive to your plant in less than 90 minutes. |
