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SMIC CEO: China foundry vendor back on track

October 11, 2010 // Mark LaPedus

SMIC CEO: China foundry vendor back on track

After a tumultuous period, Chinese foundry provider Semiconductor Manufacturing International Corp. (SMIC) is back on track, according to the company's top executive. David N.K. Wang, the new executive director, president and chief executive of SMIC (Shanghai), said the foundry vendor has moved to restore customer confidence, put more emphasis on becoming profitable and narrowed its technology focus.

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SMIC appears to be focusing on a core group of major foundry markets--logic, analog, mixed-signal, among othersas opposed to being all things to all people.

''We've put a higher priority on service,'' Wang told EE Times during an interview at the company's technology event here on Friday (Oct. 8). The end goal for SMIC is to ''be as good'' or better than the competition, he said.

At the event, Chinas largest foundry vendor also rolled out its process roadmap, in which the company is clearly lagging behind its rivals. ''We want to close the (technology) gap with our peers, he said. 'We also want to be the preferred second-source foundry for first-tier customers and ''the first choice among chip makers in China.

Time will tell if SMIC can achieve those lofty goals. As before, the company continues to face stiff competition from GlobalFoundries, Samsung, TSMC, UMC and others in the foundry business. And IC business is slowing, leaving some to believe that the ongoing shakeout in the foundry business will accelerate.

Many believe SMIC will survive. It has the backing of the mighty Chinese government, which wont let a prized firm like SMIC fail, analysts said. Last year, TSMC remained the world's largest foundry in terms of sales, followed in order by UMC, Chartered, SMIC and GlobalFoundries, according to IC Insights Inc.

Right now, the foundry business is heating up. ''We readily agree that an arms (capital spending) race is continuing in the foundry space thanks to 28-nm spending from TSMC, and capacity adds from Samsung LSI and GlobalFoundries, said C.J. Muse, an analyst with Barclays Capital, in a report. ''But we do expect foundry spending to decline 3 percent to 19 percent in 2011.
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