Huawei to run foundry biz

Monica Chen, Hsinchu; Jessie Shen, DIGITIMES Asia 0

Huawei will set up its first wafer fab in Wuhan, China's Hubei province, with production expected to kick off in phases starting 2022, according to industry sources.

Huawei's Wuhan fab will be dedicated to producing optical communication chips and modules initially, said the sources, adding that the enterprise plays a key role in China's government-led semiconductor self-sufficiency campaign.

Huawei is among the China-based companies including BYD and WingTech Technology that are foraying into the IC manufacturing field to comply with the country's efforts to boost self-sufficiency in semiconductors, the sources indicated.

BYD and WingTech are both looking to deepen their presence in the automotive semiconductor sector, the sources noted. In the automotive IGBT segment, both BYD and WingTech have enhanced their manufacturing capability and are already competitive against Taiwan-based power semiconductor specialists in terms of manufacturing technology, the sources said.

BYD reportedly is mulling spinning off its subsidiary BYD Semiconductor, which will grow as a power semiconductor IDM specializing in automotive chips. BYD also plans to build a new 8-inch fab that will be dedicated to producing automotive IGBTs, and production at the new fab is slated to kick off in 2022, the sources noted.

WingTech stepped into the IC manufacturing field after completing its acquisition of a controlling stake in Nexperia, a logic and discrete semiconductor supplier that was spun off from NXP in 2017. Nexperia's offerings include diodes, bipolar transistors, ESD protection devices, MOSFETs, GaN FETs and analog & logic ICs, and have quickly boosted WingTech's IC manufacturing expertise, the sources said.

WingTech is constructing a new 12-inch wafer fab in Shanghai that will be dedicated to producing automotive semiconductors, the sources noted. A total of CNY12 billion (US$) will be invested in the establishment of WingTech's new fab designed for an annual output of about 400,000 wafers. The fab is also expected to open by 2022, according to the sources.

China will stand a chance of developing a homegrown electric vehicle (EV) industry supply chain in the future, and could be the world's EV production hub and also the biggest market, the sources believe.

China's top-3 IC foundries - Semiconductor Manufacturing International (SMIC), Huahong Group and CSMC Technologies - are already among the chipmakers supported financially by China's local governments. With government incentives, the three foundries continue to enhance their manufacturing capability and carry out their capacity expansion projects amid the US trade sanctions, the sources said.

SMIC has plans to build four new plants in China between 2021 and 2024. With support from the Shenzhen Municipal Government, SMIC plans to pour US$2.35 billion into the establishment of a new 28nm chip plant that will be ready for production by 2022, the sources indicated. The new Shenzhen fab will bring in an additional 40,000 12-inch wafers monthly.

The rise of China's foundry sector could pose a threat to Taiwan-based foundries, particularly small- and medium-size players such as Mosel Vitelic and Episil Technologies, the sources said.