Applied Materials to Open Development Center In China

Semiconductor manufacturing equipment maker Applied Materials has begun construction of a development center in Xi’an, in central China, part of the company’s efforts to tap China’s growing chip industry.

When completed, the Xi’an Global Development Center will develop chip-manufacturing equipment that uses 200-millimeter (8-inch) silicon wafers, Applied Materials said. It did not say when the 106,000-square-foot center will begin operation or how many engineers will be employed at the site.

Asia is Applied Materials’ most important market, accounting for 63 percent of orders received by the company during the first quarter of its 2006 fiscal year. Eight percent of the company’s orders during that period came from China and Southeast Asia.

By comparison, Taiwan and South Korea accounted for 24 percent and 18 percent of its orders, respectively.

While China may account for a smaller portion of sales than Taiwan and South Korea, which both have well-established semiconductor manufacturing industries, observers see China’s chip makers playing a bigger role in the future.

Earlier this month, market analyst In-Stat said Taiwan and China will lead the growth of contract chip production. While Taiwanese companies dominate this market, Chinese contract chip makers are expected to show rapid growth over the next several years, it said.

-Sumner Lemon, IDG News Service

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