Shanghai's New Plant to Build Semiconductor Business

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Last updated at: (Beijing Time) Friday, July 25, 2003

Shanghai's New Plant to Build Semiconductor Business

One of the biggest wafer plants in China started trial operations in the city's Caohejing High-Tech Development Zone Thursday.

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One of the biggest wafer plants in China started trial operations in the city's Caohejing High-Tech Development Zone Thursday.

The plant, which costs US$687 million, aims to produce 30,000 wafers per month when it reaches full capacity next year, said Tony Liu, president of Shanghai Advanced Semiconductor Manufacturing Co Ltd (ASMC).

Wafers are used in semiconductors and other forms of electronic circuitry.

The plant will produce wafers ranging in size from 8-inch to 0.25-micron (millionth of a metre).

The company will further improve its technology to produce wafers as small as 0.18-micron next year, Liu said.

Insiders say ASMC is brave to invest so heavily in wafer production when the world's semiconductor industry is losing money and some firms are going bankrupt.

ASMC earned a pre-tax profit of 184 million yuan (US$22 million) last year, up 35 per cent over the previous year.

Shanghai now has 11 chip manufacturers but only two are profitable. ASMC is one of them.

Vice-Mayor Zhou Yupeng hopes more semiconductor businesses will come to Shanghai in future to turn the city into a global semiconductor centre.

The new wafer plant will also be backed by Royal Philips Electronics, which has a 37 per cent stake in the venture.

As a key investor in ASMC, the company said it will keep supporting ASMC to push forward the city's semiconductor industry.

Jan Oosterveld, chief executive officer of Philips Asia-Pacific, said Philips will bring leading-edge technologies to the Chinese market in the future.

Although sales of wafers globally have decreased from US$210 billion in 2000 to the current level of US$160 billion, the industry in China is still considered to have great potential.

Oosterveld is satisfied with ASMC's performance, saying that "it is one of the few companies that earns profits when the industry is facing a recession."

ASMC now has a combined production capacity of 100,000 wafers per month, including 40,000 5-inch wafers and 30,000 6-inch wafers.

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