In the coming five years, Shanghai will invest 150 billion yuan for its IT industry, half of which will be used for IC development, some 10 chip production lines will be set up.

Some Japanese companies have co-invested 1.2 billion yuan for producing monocrystalline silicon and other related products in the city.

The main silicon chips produced by domestic semi-conductor chip manufactures are 5-6 inches silicon, which accounts for about one third of the country's silicon products. As Shanghai Hua Hong NEC Electronics Co.'s 8-inch chip production line has been put into operation, demands for 6-8 inch chips will see increase.

A 2-6 inch monocrystalline silicon furnace in Shanghai Shenhe Thermo-Magnetic Electronics Co.Ltd has entered assembling and debugging phase. The company will begin small scale production in August, mass production will start next January with an initial production capacity of 200,000, next October's volume will top 400,000. The company will become China's largest silicon production base.

Insiders say that although domestic IC market showed slow growth, Chinese semi-conductor market still outshines others, the market volume in world IC market had increased to 13 percent in 2001 from 7 percent in 2000. China has become the second largest IC market only next to Japan in the Asia Pacific region. China is expected to overtake Europe to turn into world's third largest IC market.

(People's Daily March 29, 2002)