Shanghai is striving to set up a third microelectronics industrial base in Songjiang District, after the Zhangjiang integrated-circuit (IC) industrial base and the Caohejing IC industrial base.
The Shanghai Semiconductor Industry Association estimates that IC businesses in Shanghai will earn more than half of the total revenue for the sector in China.

The city therefore plans to take advantage of its niche position to boost production capacity and turn existing and new bases into world-class IC centres, said officials from the Shanghai municipal government.

A senior manager of Songjiang Science & Technology Park, who refused to reveal his name, said: "The new IC base in the park will be built around an existing project set up by Taiwan Semiconductor Manufacturing Corporation (TSMC), the top chip producer on the island province."

TSMC will construct an 8-inch wafer plant capable of producing more than 40,000 chips a year with its first-phase investment of US$898 million.

The registered capital of the new plant is US$371 million.

According to officials from Shanghai's Taiwan Affairs Office, the amount committed almost equals the total of all other investment by Taiwanese firms in the city.

TSMC's investment plans for Shanghai were released last September and were approved by the Taiwan authorities and the Shanghai government in February this year.

So far, over 10 overseas companies in the IC sector have signalled their intentions to invest in the park.

The park covers more than 42 square kilometres. The municipality will invest over 2 billion yuan (US$240 million) in quality infrastructure to support IC and related factories in the park.

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