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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (44651)	3/28/2001 9:45:11 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

China will supply 25% of its chip needs by 2005 despite buildup Semiconductor equipment sales will reach $7 billion in country by 2003, says government By Jack Robertson and Mark LaPedus Semiconductor Business News (03/28/01 06:21 a.m. PST) BEIJING -- Semiconductor capital spending in mainland China will nearly double to $4 billion in 2001 from about $2.1 billion in 2000, according to government estimates presented at industry forum here today (March 28). Investments in China's chip plants will then surge to $7 billion by 2003, said the government. Also during the forum--held on the opening day of the Semicon China trade show--government officials estimated that the industry's expansion would include five-to-six new 8-inch fabs and up to two 12-inch fabs in mainland China over the next five years. Chip sales in the so-called "China-Taiwan" semiconductor market are surging, said David N.K. Wang, vice president of Applied Materials Inc. Speaking at the Semicon China Microelectronics Forum, Wang estimated that semiconductor revenues would spiral at a 28% annual growth rate in the regional market to reach $25 billion by 2004. By 2010, the combined China/Taiwan region will become the world's second largest chip market, Wang predicted. Amid this year's sharp downturn in the semiconductor equipment business, China is quickly becoming the sole bright spot for wafer-fab tool suppliers. "I would not be surprised if [the Chinese equipment market] raises its forecast by year's end," said Stanley Myers, president of the Semiconductor Equipment and Materials International (SEMI) trade group, which sponsors the annual Semicon China event. Major tool suppliers are jumping at the chance to expand their presence in mainland China. For example, Applied Materials' sales in China are expected to increase from about $100 million in 2000 to $1 billion by 2005, said Wang. The country's market is also moving to newer production tools. "This is becoming a good market for us," said Rodney Chisholm, technical sales support manager at ASM Lithography. The Dutch lithography supplier is selling a lot of older systems in China, but ASML's largest customer--Motorola Inc.--is procuring the company's latest deep-ultraviolet scanners for a new fab in Tainjin, China, said Chisholm in an interview with SBN during the opening day of Semicon China. During the forum session, Applied Materials' Wang estimated that the two regions will account for 8.5% of the global market in 2004 and could reach 33% by 2010. Wang said didn't have separate breakouts of semiconductor output for mainland China and Taiwan. The combined regional output estimate--although politically correct in Beijing--which treats Taiwan as part of China and skews projections for the mainland. Ironically, Chinese government officials speaking at the same meeting were blunt about China's own challenge to build up its domestic chip industry. Wang and the government officials agreed that domestic Chinese IC production today only meets 20% of the domestic demand, with the remainder having to be imported. Even with the massive investments being made in wafer fabs in mainland China, the consensus at the forum was that local output will still meet only 25% of the demand by 2005. Wang said China will lead the way as the chip industry shifts from PC dominance to predominately consumer electronic IC content. Mainly due to China's gigantic population, the consumer market for chips in non-PC products will jump nine times in next decade, said Wang, during the forum, which was hosted by the Semiconductor Equipment and Materials International (SEMI) trade group. Even with the strong growth over the next four years, the penetration of PCs and cellular phones in China will remain in the low single-digit percentage range of the population. This low penetration of products will continue to make China a huge market potential for much of this decade, he added. --Jack Robertson contributes to SBN global coverage as a Washington-based editor of EBN, a sister publication of Semiconductor Business News.