High-tech firms set sights on Chengdu

Dell employees work on a production line at the company's plant in Chengdu.[Photo provided to China Daily]

Solid foundations, a skilled workforce and local government support make the city a big draw for the world’s leading tech companies, Zhuan Ti reports.

Chengdu is both a pioneer in the country’s opening-up, and a leading destination for funds from international high-tech companies looking to invest in the region.

The United States semiconductor manufacturer GlobalFoundries is one such company. As part of its global manufacturing business expansion plan, the company started building a new plant in the Chengdu Hi-Tech Industrial Development Zone on Feb 10.

The facility aims to produce 12-inch semiconductor wafers — key components in electronic devices — in order to satisfy both Chinese and global demand for the company’s cutting-edge 22FDX technology, which offers the combination of performance, power consumption and cost for the mainstream mobile, internet of things, radio frequency connectivity and networking markets, according to the company.

Total investment in the project is expected to reach $10 billion (8.15 billion ponds).

“The construction of the 12-inch wafer plant in Chengdu will be conducive to accelerating GlobalFoundries’ expansion in the Chinese market,” said the company’s chief executive, Sanjay Jha.

Construction of the Chengdu project is divided into two phases. In the first phase, production lines will be built for 12-inch wafers using complementary mental-oxide-semiconductor technology. The lines are expected to start production in the fourth quarter of 2018.

In the second phase, production lines for 12-inch wafers using advanced 22FDX technology will be built, and these lines are scheduled to start production in the fourth quarter of 2019.

The new facility in Chengdu is the company’s largest and most advanced 12-inch wafer plant on the Chinese mainland, Jha said.

He said his company chose Chengdu because of its solid foundation in the IT industry, its highly skilled workforce and vast potential for future development.

“There is no doubt that Chengdu is an excellent partner for the project. This cooperation will improve Chengdu’s reputation as a leader in China’s semiconductor and IT industry, and will also help the city to draw more investment from high-tech companies.”

Also on Feb 10, GlobalFoundries unveiled its brand-new trade name for the Chinese market, Gexin, and announced the establishment of a new joint venture with Chengdu — Gexin (Chengdu) Integrated Circuit Manufacturing.

In Chinese, the name Gexin shares the same pronunciation with the word for “innovation” and signifies rebirth, reinvigoration and reform.

Intel Corp announced on Nov 18 that its “Advanced Test Technology” facility in the Chengdu high-tech zone had begun high-volume production. This new technology was brought to China for the first time, according to the company.

Robin A. Martin, Intel vice-president and general manager of assembly testing and manufacturing, described the facility as a technological breakthrough, ushering in better products, improving flexibility and reducing manufacturing time.

“I am very excited to see this technology is landing and being developed in Chengdu as it is a recognition of the Chengdu team’s consistently solid performance, and of course the supportive local government that values Intel as a strategic asset to the city,” he said.

As one of the earliest IT giants to invest in Chengdu, Intel has kept increasing its investment in the city. In December 2014 the company announced plans to invest up to $1.6 billion over the next 15 years to upgrade its semiconductor plant in Chengdu.

The advanced test technology facility is part of Intel’s upgrade program.

In November, Siemens AG of Germany signed an agreement worth 1 billion yuan (118.59 million pounds) with BOE Technology Group’s Chengdu subsidiary to help the latter upgrade its production line in keeping with the standards of Germany’s Industry 4.0 strategy.

Siemens announced last July that it would increase its presence in Chengdu by setting up a subsidiary with registered capital of 330 million yuan.

As it is growing more international and more integrated into global industrial chains, Chengdu has risen to become the fourth pole of China’s IT industry, after Beijing, Shanghai and Guangzhou.

The city is home to a number of IT giants, such as Dell, Texas Instruments, IBM, Huawei and Alibaba. Half of the world’s laptop chips and two-thirds of all iPads are produced in Chengdu.

The city’s IT industry generated 480 billion yuan in revenue last year. This figure is expected to reach 1 trillion yuan by 2020, according to the city’s plan.

Chengdu’s GDP surpassed 1.2 trillion yuan last year, an increase of 7.7 percent from a year earlier.