Print

Mail

wiki links

China's SMIC to boost its factory capacity by half

Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路), China's biggest supplier of made-to-order chips, said its factory capacity will rise by 54 percent in the second half of the year as the company brings more plants on line.

Production capacity will reach 124,750 silicon wafers per month by the end of the year, from 80,872 as of June 30, SMIC president Richard Chang (張汝京) said at the Shanghai-based company's headquarters.

Capacity will reach 185,000 wafers a month by the end of 2005, chief operating officer Marco Mora said. SMIC, the first Chinese chipmaker to sell shares publicly, is expanding capacity even as Intel Corp, the world's biggest computer-chip maker, forecasts demand for electronics such as personal computers and mobile phones is faltering.

"There's an overbuild on a global basis but as Semiconductor Manufacturing is ramping up capacity on the back of demand from customers, it's less of a concern for them," said Chan Kum Kong, an analyst at Nomura Securities Co in Korea, who has a "buy" rating on the stock. "They're also starting from a low base, unlike Intel or Taiwan Semiconductor Manufacturing Co (台積電)."

The Shanghai chipmaker's factories are running at 99 percent capacity and will remain almost fully used for the rest of the year even as new lines start production, Chang said.

SMIC said it isn't worried about reports of rising inventory levels among its customers.

"There have been some inventory adjustments, mainly among the US customers and partly due to seasonal reasons, and they're under pressure to re-adjust their inventory," Mora said. "The inventory level is only one tenth of that in 2002 when it went into a downturn. We think this is only a temporary situation."

SMIC also plans three new plants at its Shanghai base, including a US$19.2 million venture with Japan's Toppan Printing Co that will be China's first producer of CMOS image sensors used in digital cameras, Chang said.
This story has been viewed 2313 times.