"A complete industrial chain from IC design to semiconductor foundries and equipment manufacturing has been in place since the establishment of the Beijing SMIC Universal Corporation (BSUC) last month," said Liang Sheng, vice-president of the Beijing Semiconductor Industry Association and a division head of the Beijing Municipal Economic Commission.

BSUC, initiated by the Shanghai-based Semiconductor Manufacturing International Corp, was the biggest semiconductor project in Beijing with US$1.25 billion of investment and a capacity for eight-inch 0.18-micron semiconductor foundries.

"Of course, we cannot solely rely on BSUC in the development of semiconductor manufacturing," Lang said late last week.

According to Lang, two groups led by US firms are talking with the municipal government about the construction of two manufacturing plants with eight-inch technology, which will evolve into 12-inch technology, currently the most advanced one in the world.

He said there are also talks about building a six-inch state-of-the art GaAs manufacturing plant with foreign companies.

GaAs, a semiconductor like silicon but with a higher frequency, is frequently used in wireless communications, including mobile phone chips.

In its traditionally strong area of IC design, the municipality will sponsor IC designers and promote the large-scale production of their research results.

Liang said the municipal government will spend 100 million yuan (US$12 million) annually to support about 150 design houses in the development of core technologies and products, such as high-definition TV chips, IC cards for identification, digital camera chips and embedded central processing units.

At the same time, the city is also trying to be a leader in semiconductor equipment manufacturing.

Liang said the Ministry of Science and Technology will let the Beijing Municipality develop etchers and injecting machines for 0.10-micron semiconductor manufacturing technology, which have been on the list of the State's 863 Programme and will get capital support from the central government.

"We must aim at the highest standards in the world or we will always be a follower of advanced countries and be controlled by them," Liang said.

(China Daily October 28, 2002)