Investment by the semiconductor industry in the Chinese mainland, which is mainly led or directly invested by the government, will top 140 billion yuan (US$20.6 billion) in the next five years, triple the previous five-year figure, an industry official said yesterday in Shanghai.

Through the investment, the government aims to stimulate the economy and help the domestic industry evolve in the global semiconductor technology ladder, said Mark Ding, president of SEMI China, a global semiconductor industry organization.

"People in the other markets don't have the capital to do such investment during the global financial crisis, therefore it's an opportunity to upgrade the industry," Ding said at a conference during the Shanghai International IT and Electronics Fair.

The new projects include plants in Jiangsu and Shandong provinces and expansion projects of Hynix, Intel and SMIC, the Chinese mainland's biggest made-to-order chip maker.

The new facilities are all 12-inch wafer plants, which represent the most advanced technology level in the world, Ding added.

At present, most of domestic facilities are 8-inch wafer plants, less advanced compared with the plants of Taiwan Semiconductor Manufacturing Co and Singapore-based Chartered Semiconductor.

In the past five years, the total investment in semiconductors amounted to 45 billion yuan, according to SEMI.

Separately, the government has established a fund of 200 billion yuan, which will support the software and chip design sectors by 2020.

Meanwhile, Shanghai-based Huahong NEC is close to acquiring Grace Semiconductor to expand capacity, Ding added.

Both companies declined to comment but a source, who didn't want to be identified, said a deal will be done by the end of this year.

(Shanghai Daily November 28, 2008)