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

To: daryll40 who wrote (52348)	9/17/2001 8:19:54 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

ST Sees Growth in China Despite Slowdown Despite the current market slowdown, STMicroelectronics' China operation is working on a number of plans to cope with the growing demands of the next few years. L C Kwan, China director of STMicroelectronics Asia-Pacific, said that as demand grows, the company's manufacturing plant in Shenzhen has the capabilities for three additional production floors, each of 4,400 sq m, bringing the total production area to around 22,000 sq m. The Shenzhen plant, called Shenzhen STS Microelectronics(see Fig), is a joint venture between ST and the Shenzhen SEG Hi-Tech Industrial Co Ltd. It began operation in June 1998, with a production area of 8,800 sq m on two floors. Construction of the new building, set aside for expansion, has been completed, and production can start after equipment installation. In China, ST's product development is done mainly at the design and development center attached to the Shenzhen plant. It also has application labs in Beijing, Shanghai and Shenzhen. The application lab in Beijing, at which more than 10 engineers work, is focusing on more advanced system developments. These systems will be targeted at near-future products for local as well as global markets, such as products for smartcards and digital consumer electronics. New products from the application lab are expected to reach the markets in one or two years' time. At present, approximately 70% of ST's sales in China are handled by the company directly, while the remaining are handled by its distributors. Kwan said most of the company's direct customers are large- and medium-sized companies, including both multinational companies operating in China and local companies. Companies Expand Kwan said that over the last few years many Chinese companies have grown bigger and have diversified their business. For example, Legend Computer Group has diversified from PCs to networking and other products, and Haier Group from home appliances to mobile phones and TVs. These companies have also increased their presence on the global markets. ST is working closely with some major Chinese companies on new product developments. It is working with Huawei Technologies Co, Ltd, on the development of networking products, and with the Changhong Group of Companies on set-top boxes and digital consumer applications. It is also working with a major Chinese company to develop wireless applications. In May, ST conducted a series of road shows in Shenzhen, Beijing and Shanghai to introduce its range of products to potential customers in China. Compared to previous road shows, this year's covered a broader range of products, as more Chinese companies are looking for new products for future growth. In Shanghai, ST opened a warehouse in the Waigaochao district in July. The establishment of this warehouse is especially significant for the company's development in China, as it enables the company to sell directly to customers and to conduct transactions in the local currency (both of which were prohibited under previous registrations). Kwan is optimistic about China's electronics industry despite the current slowdown. He said that according to Dataquest, the country's electronics industry is expected to increase by 7-8% this year, and the growth rate for the semiconductor sectors will be even higher. He said China is the fastest growing market for ST, and is set to become the largest in Asia within the next two years. by Keith Chan, Shenzhen (September 2001 Issue, Nikkei Electronics Asia)