Semiconductor Industry 909 Project Upgrade

China's semiconductor industry 909 project upgrade project - Shanghai Huali Microelectronics Co., Ltd. (hereinafter referred to as "Hua Li") will be trial production in early April this year. This is also the first 12-inch semiconductor factory project to be fully invested by state-owned funds.

“First Financial Daily” saw from Huali official website that, on January 17, Huali’s management and management organization meeting was decided by research, based on the progress of project equipment installation and commissioning and the advance of technical preparations, and that the production capacity has been fully implemented in 2011. In the case of the project, the project will enter the pre-production stage in early April, and the mass production of 65-nm logic process products will be realized during the year. At the same time, the project will carry out the selection and ordering of the second batch of equipment in accordance with the technical grade requirements for 45-nanometer products, in preparation for the trial production and mass production of 45-nanometer products next year.

Huali's starting point process is higher than SMIC's Beijing 12-inch plant, which started at 90nm when it was put into operation. Huali official website shows that in 2011, its 65-nm logic process products will reach mass production. At the same time, the selection and ordering of the second batch of equipment will be prepared in accordance with the technical grade requirements for 45-nanometer products for trial production and large-scale mass production next year.

This is related to a strategic cooperation reached by Huali in late May last year. At that time, it signed the "cooperation agreement for joint development and transfer of technology" with Belgium's IMEC Microelectronics Research and Development Center. The two parties cooperated in the development of a 65-nm process. IMEC is the world's leading semiconductor independent public R&D platform. It has extensive cooperation with industry giants such as Intel, AMD, Samsung, TSMC, and Applied Materials. It currently employs approximately 1,800 employees worldwide.

This technical cooperation can directly allow Huali to provide high-end technological services. Over the past years, China has encountered technical input restrictions. The Intel 12-inch Dalian plant that has already been put into production can currently only produce 65-nm process products.

However, Huali said that it will also rely on national integrated circuit R&D centers to jointly develop standard processes from 90 to 45 nanometers to improve technological innovation capabilities.

After Huali completed its power transformation last year, it started the move of 10,000 pieces of equipment. By the end of this year, it will complete the selection and procurement of 20,000 process equipments, carry out process development, certification and trial production of 65-45nm; in 2012, it is expected to reach the production capacity target of 35,000.

Huali Trial Production is only a corner of global semiconductor manufacturing capacity expansion. In fact, over the past few months, TSMC, Gloabfoundries, and SMIC have all increased their capacity; Intel Israel and AMD New York have also been building urgently.

Research firm Gartner reported last week that in 2011, global semiconductor industry capital expenditures are expected to reach 55.8 billion U.S. dollars, a year-on-year increase of 10%. Among them, the top three are Samsung, Intel, and TSMC. However, two days ago, Intel’s official information showed that its capital expenditure in 2011 will reach US$9 billion, almost double that of last year.

The rapidly growing domestic design industry is expected to create opportunities for Huali. According to data from the Ministry of Industry and Information Technology, China's semiconductor design industry is developing rapidly. In 2010, in the total revenue of 144 billion yuan for the semiconductor industry, the design industry revenue reached 55 billion yuan, an increase of 107% over the same period last year.