Future Horizons points out that eleven 300-mm wafers is roughly equivalent to at least 25 advanced 200-mm wafer fabs, or a MOS capacity increment of some 200,000 200mm equivalent wafer starts per week. The market research consultancy contends that mainland China plans to build 25 advanced fabs by 2005 in its bid to 'build a national chip industry', thereby providing a similar level of additional capacity.

This results in 400,000 200-mm equivalent MOS wafer starts per week by 2005, up from the current 1.2 million wafers a week level -- an increase of 33% down to China and Taiwan alone.

When the expected expansion of major independent device makers such as Intel, Samsung, STMicroelectronics, Texas Instruments, and others are added, Future Horizons foresees global wafer processing capacity increasing by at least 50% between now and 2005. This may be good news for the semiconductor equipment makers but Future Horizon's asks whether this is, "another semiconductor industry disaster in the making?".

"Taiwan's capital expenditure as a percent of revenues ran at 66% in 2000, and 55% in 2001, three times the normal industry average. Mainland China's figures are an awful lot higher. It rather begs the two obvious questions, where is all the necessary funding going to come from, and how is it going to be ever paid back?" the newsletter asks?

Of course it might be possible for Taiwan's 300-mm wafer fabs, and China's 200-mm wafer fabs to be constructed and then not ramped to volume production at full speed, but given Taiwan's past track record and China's chip-making aspirations that is, perhaps, unlikely.

Taiwan 300-mm wafer fabs plan

Company	Fab name	Product	Geometry	Year
TSMC	Fab 12	foundry	0.13-micron	2001
TSMC	Fab 14	foundry	0.13-micron	2002
TSMC	Fab 15	foundry	0.13-micron	2004
UMC	Fab 12A	foundry	0.13-micron	2001
UMC	Fab 12B	foundry	0.13-micron	2004
ProMOS	Fab 1B	DRAM	0.14-micron	2001
Nan Ya	Fab 3	DRAM	0.14-micron	2003
SiS	Fab 2	logic, graphics	0.15-micron	2003
Winbond	Fab 6	DRAM	0.11-micron	2004
PSC	Fab 2	256-Mbit	0.13-micron	2002
MXIC	Fab 4	flash	0.13-micron	2005

Source: Future Horizons, December 2002