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ZT滨海新区飞跃发展筑起IC产业白金链万芳

发布时间:2020-02-14 12:43:05 阅读: 来源:硅酸盐防水剂厂家

ZT: 滨海新区飞跃发展,筑起IC产业“白金链”

Chengdu City is fast becoming the next major biotechnology, chip, information technology (IT), LED and renewable energy hub in China. In those efforts, the city has taken several steps forward in IT and software—and a step back in semiconductors, as it has stumbled in a fab project with China's Semiconductor Manufacturing International Corp. (SMIC). In addition, increasing labour rates are a concern in Chengdu.

Compared to other hi-tech development zones in China—such as Beijing and Shanghai—Chengdu is still five years behind, said Michael McKerreghan, a chip veteran in Asia, who is on the board of commissioners at Unisem Berhad, a chip-packaging company.

On the other hand, there is a can-do spirit in Chengdu, said Robin Martin, VP of the technology and manufacturing group and general manager of assembly test and manufacturing at Intel Corp. In 2002, Martin helped set up Intel's huge chip-assembly plant in Chengdu.

In fact, Chengdu has come a long way in a short period. The city is the capital of the Sichuan province, which itself has a population of 8 crore people. Chengdu also bills itself as the logistics, business, finance, science, transportation and communications hub in southwest China.

In 2008, Chengdu suffered a blow, when a devastating earthquake measuring 8.0 on the Richter scale hit the city and region. But the region appears to have recovered from the event: In 2009, Chengdu's GDP reached RMB 450 billion (Rs.3.04 lakh crore), up 14.7 per cent, according to government figures.

Chengdu's hi-tech origins can be traced back to 1991, when the government set up the Chengdu Hi-Tech Industrial Development Zone (CDHT). The CDHT is the main hi-tech industrial development park in Chengdu. At the time, the CDHT was considered one of the six pilot (hi-tech) zones, which was backed by the government-sponsored Ministry of Science and Technology.

In 2000, the central government launched a major programme to develop China's inner region economies, including Chengdu. The so-called Go-West campaign was aimed to balance the growth with China's more-developed coastal regions and cities like Shanghai.

On the industrial/hi-tech front, the CDHT is leading the charge in Chengdu. It is developing a massive science park. With a planned area of 87km sup2;, CDHT consists of the South Park (51km sup2;) and the West Park (36km sup2;). Over 16,000 companies are registered in the CDHT, including Intel, Microsoft, Motorola, Siemens, Nokia, Ericsson, Corning, Sony, Sumitomo, Toyota, NEC, Carrefour, UPS and Alcatel.

Chengdu has made enormous strides as of late and may have found its niche: IT and software. The city claims to have one of China's largest software parks; nearly every multinational has set up shop at the site. Chengdu has not only lured multinationals to the region by offering attractive tax breaks and other incentives, but the city also gives foreign companies a foothold into the huge consumer base in central and western China.

Not all has gone smoothly, however. Its once low labour rates are steadily increasing, reportedly thanks to chip giant Intel. Like most cities in China, Chengdu faces many challenges to keep its labour costs—and engineering salaries—in check.

Labour cost woes

Intel provided a major boost to Chengdu in 2002, when the chip giant announced plans to set up an enormous IC-assembly plant in the city. The plant, which employs 2,500 workers, has been up and running since 2005.

The problems started around 2009, when Intel shut down its IC-assembly plants in Shanghai. Following those events, Intel shifted the operations to its new IC-assembly plant in Chengdu. Intel also moved an undisclosed number of employees from Shanghai to Chengdu.

The problem is that workers from Shanghai had higher salaries than those from Chengdu, reportedly causing tension in Intel's workforce. At one point, Intel's Chengdu-based workers went on strike for a short period. The U.S. chip giant quickly resolved the problem by increasing the salaries.

Awhile back, some tension was created with the combination of the two work forces, from two very different markets, which we quickly addressed and resolved, according to a spokeswoman from Intel. We typically don't discuss these kinds of workforce issues in detail, however

The net result of Intel's actions had an impact in Chengdu. While Intel's settled its internal problems, employees at many other companies and ventures in Chengdu began to question their own salary structures, and, in some cases, demanded pay raises. Chengdu, which enjoyed comparatively lower labour rates, has begun to see its salaries increase.

Compared to many other cities in China—as well as India, Japan, Malaysia, Singapore, Taiwan and other Asian nations—Chengdu still has a highly-skilled workforce with competitive labour rates. This is one of many reasons why multinationals should consider investing and setting up shop in Chengdu, said Jiang Bin, director of the CDHT within the Bureau of Investment Services, during a recent presentation.

Salaries for engineers are one-third less than those from Beijing and Shanghai, Bin said during the presentation. Besides the labour rates, Chengdu offers a number of incentives to bring investors in the region, he added.

From a strategic perspective, Bin said Chengdu is focusing on three main areas: IT, machinery and biotech/pharmaceuticals. Chengdu has a modest LCD industry, but it is quietly making a push into the LED and renewable energy fronts.

IT includes semiconductors, which has been a roller coaster ride for the local government. So far, Chengdu has seen modest development in the chip-packaging and assembly arena. Intel and Unisem have separately built IC-packaging plants in the city. Building and sustaining a front-end fab has been a different story.

One of the early chip multinational ventures in the region was Leshan-Phoenix Semiconductor Co. Ltd. Leshan is a prefecture-level city in the southern part of the Sichuan Province. Leshan is about 120km from Chengdu.

Choosing Chengdu

Formed in 1995, Leshan-Phoenix was originally a joint venture between Motorola Inc.'s former semiconductor unit and Leshan Radio Co., one of China's largest discrete IC suppliers. The venture began production in 1996.

In 1999, Motorola spun off its discrete IC unit into an independent company called On Semiconductor. At that time, On Semi took control of the joint venture in China. Today, On Semi owns 70 per cent of Leshan-Phoenix, while Leshan has a 30 per cent stake. The venture provides backend services for On Semi and Leshan.

Leshan-Phoenix is one of the most successful backend facilities within On Semi's network of chip-assembly plants, said B.S. Lee, general manager of Leshan-Phoenix Semiconductor.

The operation is looking at a new Rs.137.72 crore ($30 million) investment programme. It was fortuitous that the venture set up shop in Leshan, which remains competitive in terms of the availability of workers and labour rates, Lee said.

In contrast, there are shortages of workers—and soaring labour rages—in other chip-packaging regions, such as Shanghai, Malaysia and the Philippines, Lee said. Korea, Singapore, Taiwan and other nations face similar problems. Even Chengdu, which is only 120km from Leshan, does not have a shortage of workers, but its labour rates are skyrocketing, he said

Labour issues are becoming a concern in China as a whole. As reported, Taiwan's Foxconn recently announced it will more than double the salaries of employees at its factory in Shenzhen, China within months in response to a global outcry over recent worker suicides at the site. Other multinationals, including Honda, KFC and Toyota, have also recently announced plans to raise employee base salaries amid strikes in China.

Clearly, employees from the multinationals are seeking higher pay, but there is another problem in China: Shortages of workers. It's a complex social issue, but some believe that part of the problem revolves around China's one-child policy.

Several years ago, China embraced labour-intensive jobs from the multinationals. Today, Chinese parents are urging their children to seek a higher ground via an education or other means, which, in turn, may dissuade them from looking for labour-intensive work. It's easy to find engineers in China, said one executive, but who wants to find hard work?

In any case, Chengdu is becoming a prime site location. Until 2002, Leshan-Phoenix was said to be the largest foreign hi-tech investor in the Sichuan Province. Then, at about that time, Intel announced plans to build a huge backend facility in Chengdu.

In fact, Intel surprised some observers by setting up in Chengdu in the first place. At the time, Chengdu was an unknown, remote site. In early 2000, Intel needed to expand its backend assembly and test footprint, recalled Intel's Martin. We had several (site) options on the table.

Building more fabs

Martin said the chip giant selected Chengdu for several reasons. The government was very accommodating. The quality of education was really good, Martin said. Regarding the labour rates, Chengdu is lower than Shanghai, but that was not our main criteria, he said.

Chengdu is a relatively easy place to do business. There were many sceptics that said business can be a nightmare in China and Chengdu, said John Chia Sin Tet, chairman and group managing director for Malaysia's Unisem. Our experience has been quite the opposite. It's been a blessing to come to Chengdu.

IC-packaging and test specialist Unisem plans to expand in Chengdu. Besides chip-assembly plants, Chengdu is interested is luring chipmakers to build more front-end fabs in the region, said Wang Lin, deputy director of the management committee for CDHT.

But first, the Chengdu government must resolve its current fab headache. In 2005, SMIC set up a 200mm wafer fab in Chengdu, dubbed Cension Semiconductor Manufacturing Corp., which is managed by SMIC and backed by investors and the Chengdu government.

The fab has lost money and is now in limbo. As reported in March, SMIC is planning to end an agreement to manage the 200mm wafer fab in Chengdu. Silicon foundry vendor SMIC is in talks with Texas Instruments Inc. about taking over the operation of the fab. Sources believe the Chengdu government approached TSMC and UMC about the fab, but the two foundry vendors weren't interested.

During an event, Lin declined to comment on the status of the fab. SMIC declined to comment, although some believe the Chinese foundry vendor could have a charge of heart. During a recent conference call, SMIC said the fab utilisation rate in Chengdu is 100 per cent amid an upturn in the market

In 2006, SMIC and Singapore's United Test and Assembly Centre Ltd (UTAC) opened a joint assembly and test facility in Chengdu. The facility is also losing money and is in disarray. The plant is run by SMIC, according to UTAC, which claims to be a silent investor. There are no plans to change the arrangement, according to a spokeswoman for UTAC.

It is unlikely Chengdu will become a mecca for fabs. It simply lacks the infrastructure, while Shanghai and Beijing have a leg up and headstart on Chengdu. But Chengdu does holds great promise in IC design, said Joshua Leung, senior manager of software research and development in the networking and multimedia group in Asia-Pacific for Freescale Semiconductor Inc.

A lot of design activity is happening in China, Leung said. A few companies, Diodes, Freescale, Fujitsu, Magma and others, have IC design centres in Chengdu. In its Chengdu design centre, Freescale is bolstering its efforts, as the site has become the front lines in the development and customisation in the networking-chip arena.

There is an abundance of engineering talent in Chengdu, he said. It may not be as developed as other parts of China, nor is it as far along in IC design as India, but Chengdu is competitive in terms of engineering salaries, he added.

IT, software boost

Besides ICs, Chengdu must develop other industries, namely the OEM/ODM segment, said Jim Walker, an analyst with Gartner Inc. In fact, there are few—if any—OEM/ODM companies that are manufacturing in the region.

Many OEMs have their products built in other locations in China. Taiwan's Foxconn is supposed to set up a factory in Chengdu, which will create 100,000 jobs. But to date, Foxconn has not moved forward with the project amid troubles with the company.

Chengdu is late to renewable energy, but it is looking at solar and wind power. Earlier this year, the first-phase project of Sichuan Yuanli Optics and Electronics Centre in Chengdu was put into operation. Chengdu has carried out an ambitious plan to make the Chengdu Modern Industrial Park the largest LED production base in western China, according to the Chengdu government. The park has attracted a dozen of LED projects.

Chengdu has made the most progress in IT and software. It boasts the Chengdu Tianfu Software Park Co. Ltd, a subsidiary of Chengdu Hi-tech Investment Group. Tianfu Software Park has completed two phases, which consists of 11.00 lakh square metres. Two other phases are on the drawing board.

As one of the 11 national software bases in China, Chengdu is said to have up to 16.50 lakh technicians, and 130,000 software practitioners, according to the Chengdu Tianfu Software Park.

For the past year, a large number of enterprises, including Accenture, DHL, Maersk, Alibaba, Manulife, Amazon, and Wipro, selected Chengdu Tianfu Software Park to implant their back-offices, R D centres or development centres. To help the multinationals, the park has set up a platform of services, said Victor Jansson, vice president of the park.

Time will tell if Chengdu can live up to its promises and indeed become an IT/electronics hub in China. Some say it will take years. Others say Chengdu is on the right path and will emerge sooner than later. In terms of Chengdu's development, I don't see any roadblocks in the future, said Intel's Martin.

- Mark LaPedus

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