Motorola cleared to build 0.25-micron fab in China

Motorola cleared to build 0.25-micron fab in China
TOKYO — Motorola Inc. chairman and chief executive officer Christopher Galvin announced in Beijing Monday (Aug. 21) that the company has received final approval from local authorities in Tianjin, China to install equipment in a new chip fab destined to be one of the world's largest, Motorola said. Motorola has also received approval to construct a separate facility to manufacture consumer communications products in the same province, which will add $1.9 billion to Motorola's investments in China, making it the country's all-time largest foreign investor.

Motorola is among a growing number of the world's top chip makers looking to open front-end production facilities in China. Motorola bought the land for the Tianjin fab five years ago, and will use the facility to help meet explosive demand for cellular phones and consumer electronics products in China and Asia.

The scale of the facility, dubbed MOS 17, is proportional to Motorola's grandiose outlook for China's IC industry, which is growing at a 17 percent annual rate and will reach $18 billion by 2004, the company said. The facility will include R&D, design and manufacturing centers, and will employ a total of 2,400 workers by the time it begins operation in 2002. MOS 17 will design and manufacture microcontrollers used in cellular phones, automobiles and consumer products sold in China and other parts of Asia. In its first production stage, the site will produce three-thousand 8-inch wafers per week. That capacity will eventually expand to 6,000 wafers per week, a Motorola spokeswoman said.

Chinese government officials have been eager to import leading-edge semiconductor technology from the United States and other foreign countries, though they have been stymied by U.S. government regulations that limit technology transfers to 0.35-micron design rules. U.S. regulations are normally honored by European governments and by Japan as well.

Rules relaxed

But the United States appears to be relaxing its rules somewhat as chip companies bring 0.18-micron devices into production. Though MOS 17 will start with 0.35-micron design rules, Motorola has received U.S. government approval to migrate to 0.25-micron rules, the company spokeswoman said. She did not know the timing of Motorola's planned shift to 0.25-micron at the Tianjin fab, however.

At least one other chip maker, NEC Corp., is already shifting from 0.35-micron to 0.25-micron rules at its NEC Shanghai Huahong fab, a DRAM facility co-owned by NEC and China's Huahong Microelectronics. The shift was necessary as NEC moves its production from 64-Mbit DRAMs to 128-Mbit parts, which require smaller design rules to minimize chip size and keep wafer yields high, an NEC spokesman here said. NEC had been given prior approval by Japan's Ministry of International Trade and Industry before it started installation of the more advanced equipment earlier this year, the spokesman said.

Motorola bought the land for MOS 17 in Tianjin, southeast of Beijing, back in 1995. But after receiving U.S. government approval in 1998 to build a fab capable of supporting 0.5-micron production, Motorola shelved its plans, as the chip industry was experiencing a harsh downcycle and Asia was suffering from a regional recession, the Motorola spokeswoman said.

As part of the Monday announcement, Motorola said it will expand one of its existing facilities in Tianjin to include the new Asia Telecommunication Product Manufacturing Site. The operation will focus on consumer products such as 2G, 2.5G and 3G phones, and infrastructure equipment for GSM, TDMA, WAP, wireless IP and GPRS for domestic consumption and export.

Motorola now has 10,000 employees in China, 800 of whom are researchers employed at the company's 18 labs. The company expects its number of researchers in China to grow to 1,500 by 2001. With the new Tianjin fab and product manufacturing sites, Motorola's total investment in China will reach $3.4 billion, making it the country's largest foreign investor, the company said.