According to statistics, investment over the past two years equaled total investment for last 40 years. The number of newly built assembly lines is increasing. Ten lines to produce ten-inch chips are under construction, with a production capacity of 20 to 40 thousand chips a month. Another seven lines to produce six-inch chips are also under consideration. Meanwhile, semiconductor giants like Intel, Toshiba, ACE, Mitsubishi and Sony are busy planning new test facilities in China. It is estimated that investment will exceed 100 billion yuan (US$12.1 billion) in five years.

An official from the Ministry of Information Industry said China’s IC industry continues to grow. In 1989, China only generated 100 million chips, but last year the number reached 6.36 billion and 3.7 billion during the last six months. “A growth rate of 46 percent is unequaled anywhere else in the world,” the official said.

The structure of China’s IC industry is improving. More than 390 design companies produce IC core technology and five of these companies have annual incomes of more than 100 million yuan (US$12.1 million). The design industry earned 1.5 billion yuan (US$181.16 million) last year.

Yu Zhongyu, chairman of the semiconductor association, said that outlooks for both the manufacture and sale of IC products are optimistic. Last year, under the global market slow down, China’s IC market increased by 29.2 percent, accounting for 13 percent of the global market. It is predicted that China’s IC market will continue to grow at a rate of 30 percent and will satisfy demand for 50 billion chips worth 300 billion yuan (US$36.23 billion). To date, only 15 percent of the market’s domestic demand has been met, so IC industry investment enthusiasm is expected to continue.

(China.org.cn by Li Liangdu, December 4, 2002)