SHANGHAI, China Months after sealing a landmark agreement to license Intel Corp. manufacturing know-how, a small Chinese foundry startup is gingerly stepping into the light, providing a few details of its business strategy in the rapidly developing Chinese chip market.
Nanotech Corp. said earlier this month it would license 0.35- and 0.25-micron CMOS process technology from Intel, an arrangement that was in the making for more than a year and had been signed months before the companies made it public. Intel also said it will help train Nanotech staff and sell the firm enough 200-mm wafer equipment to produce 15,000 wafers per month.
The sensitive nature of China-U.S. technology relations means the deal will be closely watched. Intel is America's most advanced chip maker, while China is gaining currency as America's emerging technology and political rival.
Other Japanese and European companies have already licensed advanced memory chip technology to Semiconductor Manufacturing International Corp., based here, but none carry Intel's clout.
Speculation is already rampant here that the Nanotech venture could be Intel's early foray into building a full-scale manufacturing presence in China.
Neither company is going out of its way to quash the rumor. "There is no such official agreement, but that does not prohibit it. It's possible," said James Koo, the chief executive of Nanotech, in an interview with EE Times.
Intel, for its part, said Nanotech would not perform foundry work for it in China at this time. "This is a straight business deal," an Intel spokesman said. "[Nanotech] is paying cash." The deal does expand Intel's presence in China, but that presence is indirect, the spokesman said: "We are getting a relationship with a startup foundry in China."
The sensitive nature of China-U.S. technology relations means this deal will be closely watched by hawks in the U.S. government. Intel is America's most advanced chip maker, while China is gaining currency as a high-tech rival.
China is Intel's largest market for CPUs, in part because the country has a massive export-oriented PC assembly industry. Yet China is also Asia's largest PC market, having clinched the title from Japan last year.
It's no secret that the Chinese government would like to see Intel establish a plant here, and insiders here said the company has talked to a few chip makers about joint ventures or outsourcing opportunities. Thus far, however, Intel only packages chips in China.
Intel does outsource some of its products, most notably chip sets, to Taiwanese foundries. But it keeps close watch over its CPU and flash products, and the advanced technology used to make them would likely preclude their production in China out of concern for lax intellectual property protections.
If all goes well, Nanotech said it will start fab construction toward the end of 2004 and be ready for production in early 2006. Using Intel's "copy exact" approach to manufacturing, the company expects a quick ramp-up to 15,000 wafers per month. A subsequent investment phase will support expansion to 30,000 wafers per month and bring total costs to about $600 million.