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Hua Hong drops 300mm wafer plans, goes for 200mm

Posted: 30 Nov 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Hua Hong NEC? 300mm wafer fab? wafer? fab? 200mm?

A Hua Hong NEC affiliate is canceling its plans for a 300mm wafer fab in Shanghai, opting instead to put up a 200mm wafer line, the company said Tuesday.

Few details were given regarding the change. A spokeswoman would only acknowledge that the 200mm line will add to the foundry capacity of Hua Hong NEC and that the parent company, Hua Hong Group, will not immediately pursue a goal of becoming an IDM.

Rumors have circulated in China for the past few months that Hua Hong was delaying orders for 300mm wafer equipment. Originally, the company planned to set up a pilot line running 3,000 to 5,000 wafers per month by year's end. The 300mm wafer fab was part of a larger vision of transforming Hua Hong Group into an international caliber IDM, a task that had been given to Hua Hong chief executive David Wang, a former Applied Materials executive.

Zhu Yiwei, an official at the China Semiconductor Industry Association, said that lack of funds was the reason Hua Hong opted to change over to 200 mm. "But the government still hopes the country will have several big IDMs like Toshiba and Hitachi. Huahong is one of them," he said.

It was believed that Wang had already secured $400 to $500 million in backing from the Chinese government for the fab and was looking for a partner to run the huge facility. In March, Piper Jaffray's Bill Lu said STMicroelectronics (ST) was the likely technology partner.

At present, Shanghai Hua Hong NEC Electronics, a foundry venture between Japan's NEC Corp. and the Chinese government controlled Hua Hong Group, owns one 8-inch fab capable of 0.35- to 0.18?m technologies.

China currently has one operational 300mm wafer fab, run by Semiconductor Manufacturing International Corp. (SMIC) in Beijing. SMIC is building another 300mm line in Shanghai. In Wuxi, a joint venture between Hynix Semiconductor and ST is building a 300mm wafer fab that will be operational next year.

The change in plan is a minor setback for China's plans to rapidly expand its 300mm wafer manufacturing. Aside from the SMIC and Hynix-ST venture, there aren't any other companies currently building 300mm wafer facilities. A recent report by Semiconductor Equipment and Materials International forecast as many as five 300mm production lines in China by the end of 2008, with up to 70 percent of new equipment sales being for 300mm wafer gear.

In an August report, IC analyst Bill McCLean noted that after "explosive" growth from 2002 through 2004, China's foundries will increase their market share only slightly this year, from 12.4 to 12.6 percent. McClean believes the slowdown is indicative of an industry moving from a startup phase to the moderate growth rates of established companies.

Despite the slowdown, some local analysts are still bullish on fab growth in the country and predict that Intel will soon announce a project.

- Mike Clendenin
EE Times

Cai Yan in Shanghai contributed to this report.

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