Shanghai: the new Silicon Valley? A booming electronics industry creates IC demand.
China represents a growing electronics market--a target market for companies around the globe. While many countries suffered a decline in the electronics sector in 2001, China saw a 16 percent growth rate. The electronics market in China is expected to grow from $122 billion in 2001 to $366 billion in 2010, according to the Shanghai IC Industry Association. China already ranks as the world's largest producer of color TVs, VCRs, DVD recorders, refrigerators, air conditioners and mobile phones. Mobile handset production is estimated to be 90 million units per year and will continue to grow. Given the growth in the electronics industry, will Shanghai--with its many wafer fabrication facilities--become the new Silicon Valley?
Stage of the IC Market in Shanghai
China's integrated circuit (IC) market currently shows a 30 percent growth rate. Seven wafer fabrication facilities are currently headquartered in Shanghai:
Advanced Semiconductor Manufacturing Corp. of Shanghai (ASMC ASMC American Suzuki Motor Corporation
ASMC American Society of Military Comptrollers
ASMC Association of Sales & Marketing Companies
ASMC Advanced Semiconductor Manufacturing Conference
ASMC Area Support Medical Company
ASMC American Small Manufacturers Coalition ); Shanghai SIM-BCD Semiconductor Manufacturing Corp.; Shanghai Hua Hong NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98).
NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. Electronics; Semiconductor Manufacturing International Corp. (SMIC SMIC Salaire Minimum Interprofessionnel de Croissance (French: guaranteed minimum wage)
SMIC Semiconductor Manufacturing International Corp (Shanghai)
SMIC Side Mount Intercooler ); Grace Semiconductor Manufacturing Corp. (GSMC GSMC Great Smoky Mountain Council (Knoxville, Tennessee boy scouts)
GSMC Global System for Mobile Communication
GSMC Geospatial Standards Management Committee
GSMC Ghana State Mining Corporation ); and two facilities of Shanghai Belling. Motorola's Tianjin facility is not far away. Two of the seven Shanghai facilities have 8-in. wafers with 0.25-micron process technology, three facilities feature 6-in. lines with 0.6- to 1.0-micron technology, one facility has a 5-in. line with 1.2-micron feature size and another facility has a 4-in. line with 1.2-micron technology.
Today, 90 percent of the output of these wafer fabrication facilities is for export. If China is to expand the electronics industry significantly, the IC industry must grow domestically--a revelation not entirely lost on Shanghai's government officials. China started a research and development program in 1965 and has made much progress over the years. With a growth rate of 30 percent in the IC market and at least 10 wafer fabrication facilities scheduled to be built by 2005, China's IC industry is booming. Taiwan Semiconductor Manufacturing Co. (TSMC TSMC Taiwan Semiconductor Manufacturing Company, Ltd
TSMC Taiwan Semiconductor Manufacturing Corporation
TSMC Traffic Systems Management Center
TSMC Toll Station Management Controller
TSMC Transportation Supply Maintenance Command
TSMC Technical Services Manager Code , Hsinchu, Taiwan) has announced plans for a wafer fabrication facility in Shanghai, and other companies are expected to follow. Major IC fabrication fabrication (fab´rikā´shn),
n the construction or making of a restoration. equipment makers view Shanghai as a dynamic market that is expected to grow rapidly over the next few decades.
Other Areas of Interest
Not only are wafer fabrications a requirement, but the rest of the infrastructure that goes with the industry is also a must. China claims 22 material and equipment companies, and additional companies are considering expanding operations in the growing market. Applied Materials (Santa Clara, CA) expects to see two wafer fabrications, per year, constructed in China this decade and aims to push sales in the China market from $100 million in 2000 to $1 billion in 20051. While China boasts 100 design houses and 50 assembly and test facilities, at present, only a few can be considered advanced technologies. Today's IC design houses include Intel, Epson, Lattice, Trident, ISSI ISSI International Space Science Institute
ISSI Inter-Switching System Interface
ISSI International Society for Self and Identity
ISSI International Society for Skin Imaging (Bochum, Germany)
ISSI Internet Security Systems Inc. , VIA, Pericom, TES TES Times Educational Supplement (publication)
TES The Elder Scrolls (series of computer games)
TES Thermal Emission Spectrometer
TES Teaching Every Student
TES Thermal Energy Storage and Avanti. Additional companies are expected to establish design centers in the future and more.
Companies that assemble ICs into packages are also a key part of the infrastructure, and many are located in Shanghai. Featuring advanced capability in the Shanghai area, Intel assembles flip chip, plastic ball grid array “BGA” redirects here. For other uses, see BGA (disambiguation).
A ball grid array (BGA) is a type of surface-mount packaging used for integrated circuits. (BGA (Ball Grid Array) A popular surface mount chip package that uses a grid of solder balls as its connectors. Available in plastic and ceramic varieties, BGA is noted for its compact size, high lead count and low inductance, which allows lower voltages to be used. ) and various chip-scale packages (CSPs). Established IC assembly subcontractor service providers, such as Amkor and ChipPAC, are expanding Shanghai operations and will offer an increasing number of BGA and CSP (1) (Certified Systems Professional) An earlier award for successful completion of an ICCP examination in systems development. See ICCP.
(2) (Commerce Service P assembly options.
Alliances between Shanghai foundries and IC assembly houses are also being formed. Amkor and GSMC recently signed an alliance in which Amkor will provide assembly services for the foundry. New sub contract assembly operations, using advanced assembly technology, are also emerging in Shanghai. Global Advanced Packaging Technology (GAPT GAPT Georgia Association for Play Therapy
GAPT Generalized Atomic Polar Tensor ) offers package design, assembly and final test services and is focused on advanced packages such as BGAs, CSPs and high-end lead frame packages. Platronics has established a test facility and plans to add assembly capability. Taiwanese subcontractors, such as Advanced Semiconductor Engineering, Inc. (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. ), have facilities under construction, and ChipMOS has announced construction plans.
An Added Bonus
While many companies selected manufacturing sites in China to take advantage of cheap labor, these companies have also found an abundant supply of talented engineers with a hunger for knowledge. This quest for knowledge is being clearly demonstrated at seminars, workshops and conferences held in Shanghai. With presentations focused on the infrastructure development for advanced packaging, the recently formed Advanced Packaging and Interconnect Alliance (APiA) (2) held an advanced packaging seminar in Shanghai in March 2002. Speakers provided the latest information on advanced equipment and materials for packaging at the wafer level. The level of audience participation, and understanding of the issues based on a question-and-answer discussion, exemplifies the engineering talent of local employees and provides a glimpse of the thirst for knowledge Noun 1. thirst for knowledge - curiosity that motivates investigation and study
desire to know, lust for learning
curiosity, wonder - a state in which you want to learn more about something in advanced packaging and assembly that will surely be met by a quest for information and new technology.
The key to future growth of the industry will be infrastructure growth and the continued transfer of technology. Many issues must be resolved--including respect for intellectual property, U.S. export control limitations and restrictions on Taiwanese companies investing in China. Given the level of investment, and the amount of capital spending capital spending
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , the semiconductor industry in Shanghai is off to a great start to become the Silicon Valley of the Far East.
(1) Semiconductor Business News, March 22, 2002.
(2.) APiA is an alliance of companies targeted at accelerating the development of the infrastructure for advanced packaging solutions. For more information, visit www.apialliance.com.
E. Jan Vardaman is president of TechSearch International, Austin, TX; e-mail: jan@TechSearchInc.com.