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Several China 12-inch fabs put construction on hold
Claire Sung, Shanghai; Jessie Shen, DIGITIMES [Friday 21 April 2017]

Several 12-inch fab projects implemented by China-based emerging chipmakers have been put on hold raising speculation about the country's overambitious plans to revamp the local chipmaking industry.

About 14 new fabs will be established in China in 2017, according to SEMI. China is set to become the world's second-largest fab equipment spending region with spending topping US$10 billion in 2018.

Constructing a new fab requires huge capital investment. In China, local governments are striving to establish their IC industry sectors locally to accomplish the central government's long-term goal to become self-sufficient with regards to IC supply. The ability to receive constant government support plays a critical factor behind a successful production ramp of new fabs in China, according to industry observers.

Speculaiton has emerged recently in China's chipmaking industry about several local 12-inch fab projects being put on hold.

United Microelectronics' (UMC) development work conducted at its Tainan, southern Taiwan site for China-based Jin Hua Integrated Circuit has been suspended recently, according to industry sources. Jin Hua has plans to construct a 12-inch DRAM fab with technology developed by UMC. Controlled by the Fujian government, Jin Hua according to its deal with UMC agreed to provide production equipment for developing DRAM manufacturing technology and service fees to cover R&D expenses.

UMC has responded saying the joint R&D project will "continue to proceed as planned and is currently in the early stages of setting up an R&D team."

Globalfoundries is also making no progress in its 12-inch fab project in partnership with the Chengdu municipality, according to industry sources. Earlier in 2017, Globalfoundries announced the company and the Chengdu municipality had formed a partnership to build a 300mm fab in Chengdu with total investment set to reach nearly US$10 billion.

Globalfoundries previously struck a deal with the government of Chongqing to establish a joint-venture 12-inch fab locally. The fab project, however, was put on hold and is believed to have been killed by the Chongqing government.

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