After a number of false starts to modernize its chip industry, China's government and a number of fledging Chinese IC makers in 2001 promised to transform the nation into the next Asian powerhouse for semiconductors.

China's official blueprint, dubbed the "Tenth Five-Year Plan," calls for the nation to build about 25 new and advanced fabs between 2001 to 2005, including 8-inch and 300-mm wafer-processing plants. At the time, China has also described aggressive plans to surpass political rival Taiwan and other Asia-Pacific countries as the premier location for IC design, silicon foundry services, chip packaging and test (see March 30, 2001 story ).

Has China lived up to its promises in semiconductors? Not yet. While China is potentially becoming a major chip manufacturing hub, the nation has already experienced a series of ups and downs in the IC industry.

There have been a series of surprises as well. Now, for example, it looks like the Taiwanese foundry giants are invading China. Both Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. have separately announced plans to build fabs in China.

And there have been some setbacks. For example, silicon foundry startup Grace Semiconductor Manufacturing Corp. of China last summer quietly delayed its fab project--again. Originally, Grace was supposed to move into pilot production in its 8-inch fab in early 2002. Recently, the Shanghai-based company pushed out the completion of the fab and production schedule to March of 2003.

Now, Grace will not begin production in the later part of 2003, reportedly due to water drainage problems with its fab, according to sources. Grace's $1.6 billion fab is an 8-inch, 0.25-micron plant, it was noted (see July 24, 2002 story ).

In addition, faced with an internal and worldwide capacity glut, Motorola Inc. last summer delayed the production schedule of its wafer fab in China by several months, it was learned.

Motorola was originally supposed to move its 8-inch fab in Tianjin into mass production in the first half of 2002. Now, the company's MOS17 fab will not move into production until "the second half of this year," according to Motorola in Austin, Tex. (see Aug. 1, 2002 story ).

And it still remains to be seen if this fab will get off the ground. However, there is one China foundry that is making plenty of waves--China's Semiconductor International Manufacturing Corp. (SMIC) of Shanghai.

In a shocker, Texas Instruments Inc. forged a silicon foundry alliance with SMIC. TI and foundry startup SMIC are not talking about "trailing-edge" technologies. But rather the two companies are looking to co-develop more advanced foundry processes, reportedly including 0.13-micron technologies (see Aug. 29, 2002 story ).

SMIC has also announced foundry deals with Fujitsu, Infineon, Toshiba, and others. The Shanghai-based company also outlined its bold expansion plans in Beijing, announcing it will move its separate 200-mm fab and 300-mm pilot line plant into production as early as late-2003 (see Nov. 8, 2002 story ).

As in its home base in Shanghai, the company has an aggressive schedule in Beijing, which will soon feature China's first and only 300-mm plant, said Samuel Wang, president of the U.S. chip arm of SMIC, SMIC Americas, based in Fremont, Calif.

In a recent interview with SBN, Wang described the company's 300-mm fab as a "demo" or pilot line facility, which would be capable of processing 0.13-micron devices.

(Return to 2002 Top 10 list or go to No. 10).