What's Happening in the China Market?

What’s Happening in the China Market?

A Brief Recap of China Market News for January 2016

By Deborah Geiger, SEMI

The application that world’s largest contract chipmaker TSMC submitted to set up a 12-inch wafer plant in China will likely be green-lighted before Chinese New Year’s rolls around on February 8, according to the China Post on January 26.

The Shanghai Integrated Circuit Investment Fund (SICIF) announced a plan to invest 20 billion yuan (about $3 billion) in foundry SMIC and two other China chip manufacturers, according to Peter Clarke from the EE Times. His January 26 article, “SMIC to Benefit from $3 Billion Investment, speculates that the funding could help SMIC’s migration to offering 28nm.

The Taiwan minister of economic affairs, John Deng, says Taiwan’s chip designers “are keen to accept investment from China, but the higher reaches of the semiconductor industry remain off limits.”  In the article “Minister Deng says Chip Designers Need China” by Cheng Ting-Fang and Debby Wu of the Nikkei Asian Review, Deng says that he intends to lobby the new parliament to get the ban lifted.

The recent SEMI press releaseChina Semiconductor Acquisitions Surge, SEMICON China Brings the New Market into Focus on January 25 discusses semiconductor equipment spending in 2016 ─  expected to be $5.3 billion, 9 percent above 2015 spending. In 2016, total spending on semiconductor materials in China will be $6.2 billion. Programs such as “Build China’s IC Manufacturing Ecosystem” and “Tech Investment Forum-China 2016” will be offered at the upcoming SEMICON China.

The article in the Economist Chips on their Shoulders: China Wants to become a Superpower in Semiconductors” on January 23 discusses how China wants to become a superpower in semiconductors and is planning on spending “colossal sums” to achieve this.

The Nikkei Asian Review article on “U.S. Opposition Scuppers Philips' $3.3B Sale of Lumileds to Chinese Buyers” by Jennifer Lo on January 22 talks about how Royal Philips had to scrap a $3.3 billion deal to sell its lighting components units to a consortium of Chinese buyers due to opposition by U.S. regulators over national security concerns.

Solid State Technology’s Ed Korczynski writes about “Imagining China’s IC Fab Industry in 2035 on January 22, noting that China has been investing in technology to reach global competitiveness for many decades. Intel’s Fab68 in Dalian began production of logic chips in 2010, Samsung’s Fab in Xian began production of V-NAND chips in 2014, and TSMC announced it is seeking approval to build a wholly-owned 300mm foundry in Nanjing.  How and why is the pace escalating?

EE Times Silicon Valley Bureau chief Rick Merritt reports from the SEMI Industry Strategy Symposium (ISS) in an article primarily on SMIC, “China's Chip Jackpot Teases,” on January 20. Merritt postulates that China’s Big Fund is like the Powerball lottery, “A lot of money is at stake so everybody wants to play, but no one knows how to win.” Some say that $100 billion in government and private funds are available.

For a more comprehensive list of articles related to the China market and the semiconductor industry, visit China Market Central which helps you navigate the unfolding China market dynamics. The dedicated microsite aggregates and present resources on China policy and market developments.

China Market Central features market data, news, analysis and presentations to simplify the search for information and assist SEMI members in tracking the business opportunities and potential threats from the policy-driven acquisition-oriented wave of strategic investments currently taking place.

Global Update
February 2, 2016