Times may be bad for most of Asia's foundries, but not for China's Advanced Semiconductor Manufacturing Corp. The Shanghai company's trailing-edge fabs are fully utilized, its 8-inch expansion is ahead of schedule, and there's talk of an IPO and maybe, just maybe, a 12-inch fab in a few years.

It appears that news of the downturn hasn't yet reached AS-MC's part of Shanghai.

By November, ASMC will be running phase 1 volume production (5,000 wafers/month) at an 8-inch wafer fab capable of 0.25-micron processes. It plans to increase output to 10,000 wafers per month in early 2004 and to 30,000 eventually. "At this moment, the phase 1 capacity is already sold out," said Gao Zhou Miao, vice president of operations at ASMC.

The company was one of the early movers in China, starting in 1995 as a joint venture between the Netherlands' Royal Philips Electronics N.V. and the Chinese government. For years, it has run two wafer fabs: one for bipolar devices on 5-inch wafers and the other a CMOS line running 6-inch wafers.

ASMC has survived, and grown, in the ups and downs of the market by having Philips as a benefactor and by specializing in analog chips, power ICs, E2PROMs and 8-bit microcontrollers. "We focus on our niche markets. That's our long-term strategy, and we are not going to change that," Gao said. "Of course, the niche market itself may change, and if we see some new opportunities will pursue them. But we don't think we are competing with TSMC or UMC on those leading-edge technologies."

As the cell-phone market burgeons in China, ASMC is positioning its 8-inch fab as a local source for cellular chips. Earlier this year, Jazz Semiconductor Inc. said it would swap its mixed-signal and radio-frequency technologies, in-cluding BiCMOS and silicon-germanium BiCMOS process technology, for capacity at ASMC's new 8-inch fab.

Indeed, in a local market that is fast becoming saturated with fabs, Gao said ASMC is capable of surviving any shakeout. Profits were up about 50 percent in 2002, Gao said, and even though its 8-inch line is nearing completion, the company is also considering a small expansion at its trailing-edge fabs, which similarly underwent a small boost last year.

"One of the problems we have now is too many projects. We are hiring more and more integration engineers and trying to ramp capacity," he said.

Taiwan Bureau Chief Mike Clendenin can be reached at mclenden@cmp.com

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