The country's economic powerhouse is to introduce overseas investment and technology to realize its aims.

Shanghai's chip output is expected to account for at least 60 per cent of the country's total by the end of this year, according to Lin Jing, a senior engineer with the Zhangjiang High-Tech Park, the largest chip-manufacturing base in Shanghai.

Lin said the booming integrated circuits (IC) industry around the city, especially in the Zhangjiang High-tech Park, has helped the city "temporarily" claim the throne of the China's semi-conductor industry.

Zhangjiang High-Tech Park, located in Shanghai's Pudong New Area, is seeking to become the country's largest and most advanced chip manufacturing base by running 20 to 40 production lines with an annual turnover of up to US$10 billion in the following decade.

The park currently boasts more than 60 enterprises centered on IC business including manufacturing, research and development (R&D), sealing, packing and testing. Most of them are overseas-funded companies or joint ventures, according to park officials.

The city's southwestern Songjiang District and neighboring cities of Suzhou and Wuxi in East China's Jiangsu Province are also preparing to join the industry by introducing investment from Taiwan Province and Japan, according to local government sources.

The city's current chip output is not available as some production lines are under construction or on trial operation.

The city's largest chip developer - Semi-conductor Manufacturing International Corporation (Shanghai) - has invested US$1.47 billion since last year to build three production lines in the park and will produce around 37,000 chips per month by the end of this year.

The Grace Semi-conductor Manufacturing Corporation, another chip giant, is also building its chip-manufacturing base in the park using investment totalling US$1.63 billion. It is expected to start production at the end of this year.

The two chip giants, both of which have Taiwan origins, will become the flagship of the IC industry in Shanghai as well as in eastern parts of the country, park officials said.

But Shanghai still needs to provide more encouragement to chip design businesses instead of just focusing on manufacturing.

"The core of the chip industry is the design," said Lin.

Zhangjiang High-Tech Park is also targeting becoming an advanced micro-electronics research center within 10 years.

The park has taken action to attract more overseas technicians to join the IC industry there, according to the government sources.

The Shanghai Municipal Bureau of Personnel set up a special office in the park last month to issue Shanghai residence cards, or "green cards" to overseas technicians working there.

Semi-conductor Manufacturing International Corp, for example, employs around 500 overseas technicians and managers in its workshops in the park.

(China Daily July 31, 2002)