The opening of the factory, almost three years after its ground-breaking ceremony, consolidates Shanghai's status as the capital of China's integrated circuit industry.

The company says it plans to produce 27,000 8-inch silicon wafers each month by the end of next year. Its monthly capacity is expected to reach 100,000 wafers in 2006, when full-scale production begins.

An opening ceremony for the facility yesterday included Taiwan tycoon Wang Yung-ching's son, Wang Wen-yang, who serves as president of the corporation, as well as Jiang Mianheng, vice president of the China Academy of Sciences.

Overseas and domestic investors poured US$1.63 billion into the plant in Zhangjiang High-Tech Park, making it one of the city's largest foreign-funded ventures.

"Overseas investment in the integrated circuit industry in the Yangtze River Delta has reached US$8 billion, more than half of the total investment in the industry in China," said Vice Mayor Jiang Sixian. "This is a budding industry and we welcome more IC companies to Shanghai."

Made-to-order plants, or foundries, receive blueprints of integrated circuit from chip design companies and carve them onto blank silicon wafers. The finished wafers are then packaged into chips, which will be installed in mobile phones, computers and home appliances.

GSMC has built its plant to host 12-inch wafer fabrication lines, the most advanced equipment in the world. But as chipmakers on the Chinese mainland have routinely met difficulties importing cutting-edge chip production equipment from the United States, the plant has to run 8-inch wafer lines at the present stage, industry insiders said.

Nevertheless, GSMC has developed its own processing technology to carve lines as thin as 0.15 microns onto blank wafers, which is a major breakthrough in China's chip manufacturing industry, said Zou Shichang, chairman of GSMC.

The launch of GSMC's operation is just another milestone in the emergence of China's chip production powerhouse in Yangtze River Delta. Last Wednesday, Infineon Technologies AG, the world's sixth-largest semiconductor company, announced a US$1.2 billion investment in the region and moved its China headquarters to Shanghai from Hong Kong.

Also last week, Semiconductor Manufacturing International Corp increased its local investment by US$630 million to expand the production capacity of its three 8-inch wafer plants in Shanghai and build a 12-inch wafer plant in Beijing.

(Xinhua News Agency September 25, 2003)