TWENTY NEW FABS TO BE BUILT IN CHINA BY 2008

China SEMI: China Semiconductor, Equipment and Materials Trends and Forecasts. In 2004, new semiconductor equipment sales in mainland China reached US$2.73 billion; used/refurbished equipment sales are estimated at US$180 million; fab materials sales totaled US$391 million; and the packaging materials market reached US$781 million, according to the , a comprehensive new market research report that is now available from SEMI.

China's semiconductor manufacturing is a relatively small share of the world total, but the number of new fabs and packaging plants are increasing relative to other market regions. The report indicates that twenty new fabs are expected to be built in China between 2005 and 2008, with many of the projects to be equipped with used and refurbished equipment.

Furthermore, the number of silicon wafers consumed in China increased dramatically, while the first 300 mm fab began pilot production in 2004.

Estimated Silicon Wafer Consumption in China (Annual Wafer Consumption)

-- Installed 200 mm and 300 mm wafer capacity at the end of 2004 was equivalent to 106 million square inches (MSI) per year. -- Many of the 150 mm (and smaller diameter) fabs have been equipped with used or refurbished equipment. -- Chinese equipment companies and related institutes have lobbied the central government to invest in research and development for high-end tools such as steppers and etchers for 90 nm node/300 mm processing -- The local supply chain remains immature because of financial/capital considerations and current limitations with locally-available skilled talent and some multinationals are cautious in working with local companies because of intellectual property concerns. -- China is home to over 35 domestic, joint ventures and multinational semiconductor manufacturers with wafer fabrication plants. -- There are approximately 200 assembly and test companies; 20 multinational packaging materials suppliers; and 40 domestic manufacturers of equipment for the semiconductor and related microelectronic industries in China. (The report provides detailed location graphics by industry segment)

China Capital Equipment and Electronic Materials Market Outlook Publ 20050609