Exec predicts China's fab growth will slow in 2006
Posted : 16 Dec 2003
China's booming fab construction industry will begin to level off in 2006, predicts a spokesman for Semiconductor Manufacturing International Corp., one of China's leading pure-play semiconductor foundries. At that point, China's chipmakers and design houses will enter a period of consolidation, said Robert Tsu, director of customer engineering for SMIC.
"Not many companies can afford the $1.5 billion needed to build a new fab," said Tsu, while delivering a keynote address recently at Jedex Shanghai, a Jedec Solid State Technology Association meeting.
Tsu said that only eight of the 56 fabs operating in China have 8-inch wafer capability, while 17 fabs are still running 3-inch wafers, 15 use 4-inch wafers, six use 5-inch wafers and 10 use 6-inch wafers.
SMIC is planning to build three 12-inch wafer fabs in Beijing, according to Tsu.
Tsu said China had more than 400 chip design houses in 2002, and this number will grow to 500 in 2004. China also now has 108 chip assembly and test plants, he added.
Despite new fabs being built in China, domestic chip production will still fail to meet soaring demand, Tsu said. Domestic semiconductor output in 2003 will total $4.8 billion, far short of the $22.1 billion estimated chip demand, he said. In 2004, domestic chip production will reach $6.3 billion, still far below the $27.6 billion demand in China, he said.
Booming IC demand is driven by the growth in China's cellphone and PC sectors, Tsu said, pointing out that the country is now the largest handset market and the second-largest PC market in the world.
- Jack Robertson
EE Times
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