SANTA CLARA, Calif. -- Silicon foundry startup Beijing Huaxia Semiconductor Manufacturing Co. Ltd. (HSMC) of China has quietly delayed the construction of its initial wafer fab, reportedly due to the current IC downturn, a capacity glut, and other factors.
Beijing-based HSMC was originally supposed to break ground on its initial fab last spring, with plans to move into production by the third quarter of 2002. The 8-inch, 0.25-micron plant was supposedly capable of making 45,000 wafers a month (see March 27 story ).
However, the Chinese foundry will not break ground on the plant until early-2002, according to sources in China's IC industry. And now, HSMC has no idea when the company will move into production with its proposed fab, according to sources.
The company's fab delays could impact its grand plans to become a foundry giant. In total, HSMC aims to build four wafer fabs by 2010, including three 8-inch plants and one 300-mm facility. Overall, the company plans to invest $10 billion in these projects during the decade, according to officials
Officials from HSMC declined to comment on the fab delays. HSMC is a joint venture between Beijing-based steel giant Shougang Group, the Beijing municipal government, and two U.S.-based design houses, Alpha and Omega Semiconductor Inc. and Joshua Semiconductor Inc.
HSMC itself is a separate operation from another Shougang-backed chip venture, dubbed Shougang NEC Electronics Co. Ltd. Beijing-based Shougang NEC is a joint venture between Shougang and Japan's NEC Corp.
Sources indicated that HSMC delayed its fab project, due to the current IC downturn and uncertainties in the market following the U.S. terrorist attacks on Sept. 11.
The downturn has hurt all foundry players, including HSMC. Startups like HSMC were counting on a robust chip market to propel the need for new foundry providers, especially in China.
Even China's own IC market is sagging, which could also possibly impact the need for new foundry providers in that nation. Chip makers looking for growth in China are finding something that they didn't expect--a booming marketplace being pulled down by too much competition and price erosion, according a recent forecast by Dataquest Inc. of San Jose.
Chip revenues in China are now projected to decline by a surprising 18% this year compared to 2000, but the market will rebound in 2002 with 5-to-6% growth, said the Dataquest forecast (see Nov. 9 story ).
HSMC is one of several new foundry startups in China. One Chinese foundry startup--Semiconductor Manufacturing International Corp.--has recently moved into production with its initial fab in Shanghai. Another foundry, Shanghai Grace Semiconductor Manufacturing Corp., will begin production next year.
