Located at Singapore's Pasir Ris Wafer Fab Park, SSMC will use mainstream CMOS processing for high-volume system-on-chip products. Initial output will be 0.25- and 0.18-micron ICs, moving to 0.15- and 0.12-micron devices in 2002.

The fab will be able to produce 30,000 eight-inch wafers per month when full capacity is reached, its backers said. SSMC's CMOS logic chips will be used for telecommunications, multimedia, digital consumer electronics and networking applications.

The current downturn will allow the fab to increase manufacturing capacity and push its semiconductor technology in time for a market rebound, said TSMC president F.C. Tseng. "We are confident that this development will lead to win-win results for TSMC, Philips, SSMC and Singapore," Tseng said.

The joint-venture partners began building their fab in early 1998, at the height of the Asian financial crisis. "Now, with the end of the monetary crisis, Asia is saddled with another problem: a worldwide contraction in the IT and electronics market," said Russell Wong, a research analyst at CSBO Asset Management, based here. "However, in another two years' time, we will see an upside and a faster uptake in semiconductors."

Arthur van der Poel, chief executive of Philips Semiconductors, said the new fab is intended to meet future market demand. "With the increasing emphasis on systems-on-silicon and the growing market for chips with feature sizes of 0.15 micron and beyond, this long-term investment will deliver the right products at the right time to meet industry demands," he said.

SSMC is expected to employ 1,000 workers by the time maximum capacity is reached. A core team of engineers and designers from Philips Semiconductors and TSMC planned the facility. More than 150 engineers have so far been trained at Philips' fab in Nijmegen, Netherlands, and at TSMC's facilities in Taiwan.

The new fab produced its first yielding silicon only 90 days after process equipment was installed. SSMC's production cycle time and yields are already comparable with the best achieved by Philips and TSMC fabs, the partners said.

SSMC intends to focus on high-value-added manufacturing activities that will benefit supporting industries here, said Tony Lear, SSMC's chief executive officer.

The Singapore government "will continue to invest heavily in infrastructure and human capability ahead of demand," said George Yeo, Singapore's Minister for Trade and Industry, adding that this was one reason "why Philips and TSMC have invested in Singapore."

Yeo said several government training initiatives are planned to enable further expansion of Singapore's wafer fab cluster, including postgraduate training along with research and other training programs. "They will ensure a greater availability of manpower with postgraduate-level training," Yeo said.

The government will also encourage companies to sponsor graduate engineering students at the National University of Singapore and the Nanyang Technological University. Programs there will train engineers for various industries including semiconductors. The government hopes to train more than 2,000 semiconductor-related engineers over the next three years in new and existing programs.

"This would help sustain the advanced technologies in the various sectors in the economy, especially in the wafer-processing industry," said Douglass Ooi, a faculty member at the National University of Singapore.

Several industry experts predicted the semiconductor market would eventually rebound, achieving double-digit growth after two to three years.