CHENGDU, China -- Chengdu-- a city in southwestern China that boasts a
population of about 15 million people-- is mainly known for its spicy, tangy
Another description is apparent in Chengdu: ambition. In fact, Chengdu 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 labor rates are a concern in
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
On the other hand, ''there is a can-do spirit’’ in Chengdu, said Robin
Martin, vice president 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 80 million
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 ($66.2
billion), up 14.7 percent, 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 program 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
87-square-kilometers, CDHT consists of the South Park (51-square-kilometers) and
the West Park (36-square-kilometers). 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 labor rates are steadily
increasing, reportedly thanks to chip giant Intel. Like most cities in China,
Chengdu faces many challenges to keep its labor costs--and engineering