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In a move which signifies a more cooperative relationship between China and other major semiconductor powers the China Semiconductor Industry Association (CSIA) is set to join the World Semiconductor Council (WSC). 

The CSIA and the WSC yesterday signed a memorandum of understanding in Beijing which invites the Chinese body to apply for membership of the WSC.

The WSC is composed of industrial organizations from all major semiconductor manufacturing and consumption regions in the world except for China which is the largest consumer of semiconductors and the fastest growing manufacturer of the product.

"The accession of the CSIA into the WSC will promote exchanges and build a mutually beneficial relationship between the two organizations," said Yu Zhongyu, chairman of the CSIA.

He expected the Chinese government to ratify the accession agreement "very soon."

The CSIA has been talking with the WSC since 2001 about council membership. But the relationship between the Chinese semiconductor industry and WSC members has been rocky.

In 2003 the WSC and the US Semiconductor Industry Association (SIA) launched complaints against China's value-added tax (VAT) preference policy to semiconductor makers in China. The policy, drafted in 2000, said the actual VAT burden on semiconductor manufacturers should not exceed 3 percent.

Since the VAT rate on imported products was 17 percent the WSC and the SIA believed it was unfair on imported products although China had a different interpretation on the actual VAT burden and in 2004 scrapped the policy.

The US semiconductor industry also complained that the rapid growth in manufacturing capacity in China would lead to a global excess in production and called on the US government to set barriers on semiconductor manufacturing equipment exports to China.

The accession of the CSIA into the WSC will enhance cooperation in both the global and Chinese semiconductor industries.

"The CSIA's active participation will strengthen the WSC," said Brian Halla, WSC and SIA chairman. "The WSC is 10 years old and now, with the participation of the CSIA, the next 10 years will be more exciting for the semiconductor industry," he added.

Halla said that CSIA membership of the WSC would play a fundamental role in China's efforts to build an innovative society.

SIA President George Scalise said CSIA member companies would have access and contribute to the "International Technology Roadmap for Semiconductors," a collective effort by top semiconductor scientists and engineers to identify the technology trends in the industry over the next 15 years. Chinese companies could also learn from the experience of leading global counterparts in environmental protection.

The accession requires China to provide a transparent policy on decision-making, give equal treatment to both domestic and foreign companies and strictly observe intellectual property and environmental protection.

(China Daily June 16, 2006)