Richard Chang of Semiconductor Manufacturing International is a former executive at US-based Texas Instruments, the same company TSMC Chairman Morris Chang spent many of his chip industry years. During an industry trade show earlier this year, the Semiconductor Manufacturing International executive said many overseas Chinese engineers and executives are going to China to help build the chip industry there.
Taiwan's industry was built in a similar manner, by inviting overseas experts, in many cases ethnic Chinese, to come work in Taiwan.
Following the Taiwan model is beginning to bear fruit for China. Intel, Motorola, NEC and other multinationals have invested in plants there and the rush is on for Taiwanese and Singaporean firms.
But some analysts say over-hype and over investment could lead to another failure. China plans to build up to 25 new chip plants by 2005 in Shanghai and Beijing, according to its official "Tenth Five-Year Plan."
"I'm not even sure that's a good idea," said TSMC's Chang during an institutional investors conference in October. Building too many plants is how the chip industry usually falls into recession, as over supply drags down prices.
RSS