Analyst: China's IC manufacturing spend paying off

Dylan McGrath, EE Times
(06/25/2010 3:13 AM EDT)

SAN FRANCISCO—Semiconductor fabs in China produced 40 billion ICs in 2009, accounting for 25.1 percent of domestic demand, up from 20.9 percent in 2004, according to a new report that concludes that massive investments in China's semiconductor industry are paying dividends.

Robert Castellano, president of market research firm The Information Network (New Tripoli, Pa.) said through a statement that the recession combined with limited investment by the Chinese government has resulted in only $7 billion being spent on fabs in China over the past five years—enough to build only two 300-mm fabs.

But the tide will soon shift, as the Chinese government has earmarked $25 billion in spending for its chip industry over the next five years, including $5 billion for a joint venture between Elpida Inc. and Suzhou Venture Group and $5 billion for SinoChip Semiconductors Ltd., according to Castellano's latest report on the market for chip manufacturing equipment in Mainland China.

Castellano predicted that by 2013 one third of China's IC needs will be met internally

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