BEIJING U.S. semiconductor industry executives at a technology development seminar this week said they will bring China into the World Semiconductor Council, and expressed support for China's entry into the World Trade Organization.
George Scalise, president of the Semiconductor Industry Association, told Chinese government and industry officials here that the SIA will work for China's early admission to the World Trade Organization (WTO) and for normalization of trade relations between China and the United States.
"The SIA urges the U.S. government to reform U.S. export control laws, grant China normal trade relations and admit China to the WTO on commercially viable terms," Scalise said. "We are bringing the China Semiconductor Industry Association into the World Semiconductor Council."
Current members of the world chip council include the SIA, the Electronic Industries Association of Japan, the European Electronic Component Manufacturers Association, the Korean Semiconductor Industry Association and Taiwan Semiconductor Industry Association.
"Membership is very important to China because we believe the IC will be the building block of its economy in the next century," Scalise told an audience that included senior officials from China's Ministry of Information Industry and other government ministries. Also attending were executives from SIA member companies Intel, National Semiconductor and Micron Technology.
The chip council works to eliminate trade barriers for semiconductor makers around the world. SIA representatives spent much of their visit here meeting with Chinese officials about eliminating chip tariffs; the lifting of tariffs is a basic requirement for WTO membership.
"In a connected, horizontal semiconductor market, free trade is the best protection for China," said James Jarrett, president of Intel China.
Chinese officials said they are working to reduce semiconductor tariffs based on WTO requirements. "Our tariffs actually come from restrictions [on] new technologies in advanced countries," said Yu Zhongyu, president of Beijing Huahong IC Design Co. Ltd. "If we had gotten the latest technologies for commercial applications, we would have been more open."
The Ministry of Information Industry (MII) also announced its forecast for the Chinese IC market during the technology seminar. The report predicted greater opportunities here for global chip makers. An industry expert said favorable government policies on foreign investments would benefit foreign companies willing to transfer technology to Chinese partners.
Xu Xiaotian, chief of MII's Department of Electronics and Information Production Information, said that in 2000, Chinese IC consumption will reach 1.8 billion chips worth $6.3 billion. By 2005, MII predicts chip consumption will grow to 3.6 billion ICs valued at $12.1 billion.
MII also predicted the Chinese market would account for 4.5 million PCs, 35 million line switches, 30 million color TV sets and 13 million cellular phones in the coming years.
China's expanding industry now includes six wafer-processing fabs using process technologies down to 0.35 micron. More than 10 packaging facilities are churning out up to 300 million packaged chips a year.
MII said Chinese fabs produced 2.3 billion ICs last year worth about $1 billion, far short of what it needs. Xu said Chinese manufacturers accounted for 0.8 percent of global chip production, and met only 20 percent of domestic demand.