SHANGHAI, China – Quick: Name a semiconductor manufacturer that runs a school and a real estate business along with their foundry service.
There’s only one--Semiconductor Manufacturing International Corp. (SMIC), based in Shanghai.
Founded in 2000, SMIC symbolizes China’s ambition to become a key player in the global semiconductor industry. SMIC also developed a template for successful recruitment of world-class talent, by building close to its headquarters a residential campus together with an award winning K-12 international school, which as of 2012 had an enrollment of more than 2,000 students.
The big idea of developing a residential campus complete with school came from Richard Chang, SMIC’s founder. Chang, even long after he left the company, is still adored and respected by many of SMIC’s employees and the high-tech community in China.
To attract to China and SMIC talented people the world over, Chang figured out that it’s important to go beyond the usual financial incentives. At the inception of SMIC, he offered optional housing and educational programs for those with families. The package clicked with many executives who weren’t initially sure about taking a job in China.
The road SMIC has traveled thus far, however, has been treacherous. The company suffered from decade without profits, lawsuits filed by its rival, and sudden management changes in recent years. Although SMIC still needs to close the gap with the world’s leading foundry companies such as Taiwan Semiconductor Manufacturing Co. and GlobalFoundries, the company’s business seems picking up long at last, under the current CEO, Tzu-Yin Chiu.
You’ve probably heard of Foxconn’s dormitories in Shenzhen, jammed with young production line workers recruited from the countryside. Far less known is this semiconductor company–unusual in China or anywhere else in the world–that actually operates a school and provides family living quarters for workers and executives.
The following slideshow illustrates the creation of the SMIC founder Chang--SMIC’s homes and the SMIC School, located within a five-minute drive of SMIC’s Shanghai fab.
These accommodations are rented to SMIC employees at below market prices. Certain employees are even qualified to purchase the properties at a deep discount after a specified period of service. The prevailing joke in the semiconductor business in Shanghai is that SMIC is a bigger success in real estate than it is in the foundry business.
But SMIC deserves credit for writing a text-book scenario on how to set up a successful operation in emerging markets. The key is the school.
The SMIC School, offering an English Track that runs on a U.S. high school curriculum, is known as one of the best schools in Shanghai--even better than the American School in Shanghai--by the expatriate community. On the theory that the best school needs the best teachers, the bilingual school recruited its teaching staff globally, including career educators at prep schools in the United States.
A Harvard Business Review article in 2009 that examined SMIC’s strategy–including the SMIC School–pointed out that “graduates from the school had been admitted to top universities in the U.S., including many Ivy League schools. The school became a popular choice even for non-SMIC employees, which accounted for more than 60 percent of the student body.”
SMIC’s own 260,000-square meter campus is expansive and beautifully landscaped. The living quarters includes big houses for executives, townhouses for employees, and low-cost dormitories for SMIC’s manufacturing assistants.
In short, this may be China, but it ain’t Foxconn.
SMIC headquarters located in the Zhangjiang Hi-Tech Park in Shanghai