Spot the Lion
For years now, we have been subjected to prediction and speculation about the emergence of mainland China as an economic superpower. Several semi foundries were built there with leading edge 300mm wafer capabilities, and it seemed very much like the Chinese would pull much of the world’s IC production out of other sites in Asia.
China has been ramping up procedures on protecting their intellectual property rights. However, there is still work to be done. For example, TSMC successfully litigated against China’s pre-eminent foundry SMIC in January 2005. But on August 27, 2006 TSMC filed another patent suit against SMIC claiming infringement regarding the settlement.
But we should not overlook several key points that have kept other countries on the competitive edge until now. Many companies realize that there are other excellent options in Asia.
Recently, I traveled to Singapore and had the chance to see first-hand the traits that might slow the rise of the Chinese Dragon. Here are some key points:
- Busiest port in the world (CIA world Facts)
- Close proximity to major producers and markets of India, Malaysia, Indonesia, Taiwan and China
- Cosmopolitan feel with 20% expatriate population
- World #3 (forecast) – pure-play foundry
Chartered once seemed weakened by competition that included China, but now seems to be on the march. Singapore’s foundry recently displaced SMIC from the number three spot in the IC Insights world foundry rankings (forecast for 2006)
Chartered worked very hard over the last two years to align themselves with important business and technology allies (think IBM and AMD). MPU shipments for AMD are ramping, and they are increasing output of video game processors for Microsoft’s X-box machines. Moreover, Chartered is expected to begin producing high volumes 65nm chips for TI beginning next year.
Soitec recently announced plans to build a 300mm fab in Singapore Soitec’s CEO cited increasing demand for advanced gaming chips like the X-Box IC manufactured at Chartered as a driver for advanced SOI technology.
Singapore is blessed not only by its prime trading location, but also its complete sheltering from tsunamis and other disasters that are fairly common in South East Asia. I think they will find a way to stay sheltered from the Chinese storm as well.
Singapore may not be recognized as a new Asian tiger, but the history and mythology of the Merlion and the its naming as the “Lion City” suggest that it will not go quietly without putting up an epic fight.