Monday, February 10, 2003
While attention on the Chinese semiconductor industry in recent months has focused on its emerging foundry business, it may be in the back end where China first becomes a global powerhouse.
Asia is the principal region for the global IC assembly, packaging and test industry, but China is poised to unseat its neighbors and become a packaging giant. In 2001, China accounted for about 10 percent of the $20 billion global packaging market, with revenues of $1.9 billion in 2001, according to a recent report from market research company iSuppli Corp.
Packaging revenue accounted for 80 percent of China's ntire chip industry in 2001, whereas in most other regions of the world, it accounts for 10 to 20 percent. Furthermore, the compound annual growth rate (CAGR) for the packaging industry worldwide is forecast at 6 percent, China's packaging CAGR will be 26 percent, according to iSuppli, slightly outpacing the growth rate chip fabrication in China during the same period.
In 2002, China shipped 6.7 billion packaged ICs, and 31.9 billion discretes. By 2006, it will ship 16.3 billion ICs, and 91.1 billion discretes, iSuppli said. While domestic Chinese chip consumption is growing, currently, some 70 percent of the ICs packaged in China are imported and subsequently exported, iSuppli said.
The Chinese packaging industry doesn't currently have advanced packaging capabilities such as 3D and flip chip, iSuppli noted. But in the late 1990s China did develop ball grid array, chip scale and multi-chip packaging technologies, and with its entry into the World Trade Organization, Western countries' restrictions on the export of advanced technology have been forced to ease somewhat, which will facilitate the Chinese adoption and growth of advanced packaging types, iSuppli said.
While chip companies have begun to move into China through joint ventures or wholly owned subsidiaries, so have chip packaging ventures. In 2002, National Semiconductor, Fairchild Semiconductor, Sony, IBM, ASE, ChipMOS Tech, International Rectifier all announced plans to establish packaging and test facilities in China. Domestically, China Hua Yue Microelectronics Co., Shenzhen State Microelectronics Co. Ltd. and Zhejiang Sun & Moon Jewelry Group Co. Ltd. also announced plans to jointly invest in an IC packaging company.
All told, these investments in packaging in China last year totaled in excess of $1.2 billion, iSuppli said.
By: DocMemory
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