McClean said China's best hope now is to try to entice more foreign companies to set up fabs in China, creating a larger semiconductor production base, even if it's not by indigenous Chinese companies. He noted that China has given life to several successful fabless chip companies, including Spreadtrum and Hisilicon, each of which is ranked among the top 20 fabless chip suppliers.
Samsung got the approval of the South Korean government to build an advanced 300-mm fab in Xian in April 2012. The firm started construction of the fab late last year and expects to invest some $7 billion in the project, according to IC Insights.
McClean said China's ability to attract more foreign fabs -- especially by Intel and Samsung -- will depend largely on the experiences Intel and Samsung have with their first two fabs there. Concern over intellectual property protection in China remains very much an issue. According to McClean, the lack of adequate IP protection in China is one reason that many large fabless chip vendors such as Qualcomm and Broadcom have not brought their leading-edge chip designs to Chinese foundries. (Though, he added, so far SMIC and other Chinese foundries haven't really had the production capability to build those chips, anyway.)
"I think a lot of people are going to see what happens with this Samsung fab," McClean said, noting that Samsung plans to produce sub-20nm chips there.
McClean added that it was bold of both Intel and Samsung to open fabs in China. For the most part, he said, Intel likes to have its fabs in the US and Samsung likes to have its in South Korea. Opening up a factory in China was "stepping a little out of the comfort zone" for both, McClean said.
If Intel and Samsung have success with their Chinese fabs, they might be open to building more there, McClean said. "But I don't think this is opening the flood gates to foreign investment," he added.