Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (15074)	11/8/2004 12:14:34 AM
From: RealMuLan	Respond to of 116555

Speedy rise of China's top chip FT Syndication Service 11/8/2004 BEIJING: Things tend to move fast in the, computer chip business, but the rapid rise of China-based Semiconductor Manufacturing International (SMIC) has been extraordinary by any standards. SMIC, founded in 2000, will this year storm past Singaporean rival Chartered Semiconductor to become the world's third largest foundry, or contract chipmaker, able to process the equivalent of 125,000 200mm silicon wafers a month compared with Chartered Semiconductor's output of less than 110,000. SMIC has moved just as speedily to make itself China's most advanced semiconductor company, capable of producing chips with details measuring just 0.11 microns across and boasting a brand new Beijing fabrication plant (fab) that uses technically demanding 300mm wafers. The company has also shifted smartly from loss to profit. Last week, it reported a net profit of US$39m for the third quarter, compared with a loss of US$8.5m a year earlier. It was the company's fourth consecutive quarterly profit. Sales were up 157 per cent year-on-year at US$275m. "Our progress is still very smooth and on target," Richard Chang, SMIC's Taiwanese founder and president, told reporters at the company's Shanghai HQ recently. "We are very happy and fortunate," Chang's good fortune is undeniable. SMIC ramped up its first fabs in Shanghai just as the global chip' industry was , emerging from the slump that followed the 1990s technology bubble. Established foundries which make integrated circuits to order for chip design houses and electronics companies -- have struggled to meet soaring demand, giving SMIC a chance to pick up orders and to shift its production lines quickly from testing to mass production. High capacity utilisation is vital in the chipmaking business because of the capital burden of building new fabs and the speed with which they become obsolete. SMIC also benefited from investor enthusiasm for Chinese companies, allowing it to launch a US$1.8bn initial public offering in Hong Kong and New York this year. Chang, a semiconductor veteran who sold an earlier start-up chipmaker to Taiwan Semiconductor Manufacturing Corp (TSMC), the foundry industry leader, has also made some astute calls. The first was to tap into China's deep desire for a domestic chip industry. SMIC has been supported by state investment and cheap loans from state banks. The backing of enthusiastic local officials has even been enough to persuade it to build its most advanced fab in Beijing. Building standard memory chips for established semiconductor companies Infineon, Elpida and Toshiba has won SMIC access to advanced process technologies. It also meant SMIC filled its order books much faster than it could have done by relying on demand for logic, chips from the smaller "fabless" design houses that are its key long-term customer base., Last year the company seized the opportunity to buy a troubled Motorola chip plant in Tianjin, giving it instant extra capacity and access to more technology. "Production [from the Tianjin fab] is already close to our Shanghai standards," Chang said last month. But many analysts believe the chip market has peaked, a view supported last week by rival TSMC's gloomy prediction that the semiconductor industry would show no growth at all in 2005. SMIC badly needs demand growth to fill its capacity, which it plans to increase by nearly 50 per cent to 185,000 wafers a month by late 2005. financialexpress-bd.com