| SAN JOSE, Calif. — In what could be the next boom for the IC-equipment industry, China is expected to build 20 new fabs between 2005 to 2008, according to a new report from the Semiconductor Equipment and Materials International (SEMI) trade group on Thursday (June 9). China's semiconductor manufacturing is a relatively small share of the world total right now, but the number of new fabs and packaging plants are increasing relative to other market regions, according to SEMI (San Jose). And its overall IC consumption will continue to outpace the growth of domestically-made chips in that nation. This, in turn, will fuel China's massive fab expansion programs, including the possibility of having a total of five new 300-mm plants by 2006, according to The Information Network (New Tripoli, Pa.). By 2006, China's Semiconductor Manufacturing International Corp. (SMIC) could have three 300-mm fabs, while Grace Semiconductor Manufacturing Corp. and He Jian Technology are also separately looking at building similar plants, according to The Information Network (see Nov. 2, 2004 story). Needless to say, the China market represents a huge opportunity for the equipment industry. In 2004, new semiconductor equipment sales in mainland China reached $2.73 billion, while used/refurbished equipment sales are estimated at $180 million, according to SEMI. Fab materials sales totaled $391 million and the packaging materials market reached $781 million in China, according to the trade group. And installed 200- and 300-mm wafer capacity at the end of 2004 was equivalent to 106 million square inches (MSI) per year. However, worldwide capital spending is expected to fall by 10-to-15 percent in 2005, due in part to a huge drop in at least two big markets: China and Taiwan, according to Piper Jaffray. Capital spending in Taiwan will be down about by 20 percent in 2005, while China will fall by 50 percent year-over-year due to overcapacity issues, according to Piper Jaffray (Minneapolis) (see March 21 story). Still, the equipment, materials and assembly industry is heating up in China. There are approximately 200 assembly and test companies and 20 multinational packaging materials suppliers in China, according to SEMI. There are also 40 domestic manufacturers of equipment for the semiconductor and related microelectronic industries in China. | 
