Try the new FT.com

March 6, 2006 1:04 am

Chip plant to be built in Beijing

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Beijing plans to build a $300m computer chip fabrication plant, underlining its determination to become a semiconductor manufacturing centre.

Fullcomp International Investment, a Samoa-registered holding company, plans to manufacture chips on a contract basis for local semiconductor design houses as well as international electronics groups.

Construction of the plant, the third to be built in Beijing, also reflects industry expectations of growing local demand for chips as China becomes an increasingly important link in the global electronics supply chain.

China’s technology sector depends heavily on imported chips, but the government has made creation of a domestic semiconductor sector a priority.

The Beijing city government and the suburban Linhe Industrial Development Zone have promised substantial support to the Fullcomp fabrication plant, or fab, said Jim Kuo, secretary to the company’s board of directors.

“The local government will build the fab for us and give us the land, which is together worth around $100m,” Mr Kuo said in an interview.

“They had the desire and they showed us goodwill. That’s the reason we chose Linhe.”

Mr Kuo said construction of the plant would begin this month or next. When completed it would be able to process 30,000 eight-inch silicon wafers a month.

The region round Shanghai has become China’s leading chip industry “cluster”, and Beijing officials have suffered a number of setbacks to their efforts to win a leading role in the sector.

Plans by South Korea-based start-up LMNT and US semiconductor company SPS to build plants in the Beijing area have not borne fruit, officials say.

Industry analysts say Beijing – dry, dusty and short of electricity – is a relatively unsuitable site for chip manufacturing, which requires dirt-free facilities and ample supplies of water and power.

However, Mr Kuo said that support from local officials made up for such disadvantages.

As well as providing chip manufacturing services, Fullcomp plans to establish its own design house and marketing companies and make use of state aid to help construct a separate plant to refurbish second-hand chip-making equipment.

The plant would be used to prepare the equipment needed for the Fullcomp facility and for semiconductor plants that would be set up in China by other companies, Mr Kuo said.

Unlike SMIC, China’s leading “foundry” contract chipmaker, Fullcomp does not plan to target cutting-edge technologies.

Fullcomp declined to give details of its ownership, saying only that its main investors were “overseas Chinese”.

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments
SHARE THIS QUOTE