Infineon opens chip design center in China

German chip maker Infineon Technologies AG announced on Wednesday the establishment of a chip design centre in China as the company looks to build a bigger presence in China’s growing market for semiconductors.

The newly established integrated circuit (IC) design centre, Infineon Technologies Xi’an Co. Ltd., is located in Xi’an, Shaanxi province, in western China. The centre will design chips for all of Infineon’s business groups but will primarily focus on communications chips and chips used in automotive and industrial applications, Infineon said in a statement.

The design centre is expected to employ a staff of 1,000 by 2007, making it one of the largest chip design centres in Asia, according to the company.

The design centre will work closely with two Xi’an universities, Xidian University and Xi’an Jiaotong University, to train chip designers. Infineon will establish scholarships and training laboratories with the two universities, the company said. Infineon and Xidian University will also work together to develop a National IC Talent Incubation Base, it said.

The opening of the Xi’an design centre is the latest step in Infineon’s plans to become one of the top four semiconductor vendors in China within four years, when China’s semiconductor market is expected to triple in size to more than US$80 billion, according to the company. To help achieve its goal of becoming a leading chip vendor in China, Infineon last year announced plans to invest US$1.2 billion in the country.

As part of those plans, Infineon announced in July 2003 that it would invest US$241 million over the next five years in a joint-venture test and assembly plant for memory chips in the eastern Chinese city of Suzhou, Jiangsu province.

That plant, which Infineon jointly owns with minority partner China-Singapore Suzhou Industrial Park Venture Co. Ltd., will process silicon wafers from Semiconductor Manufacturing International Corp. in China, as well as two Taiwanese memory makers, Winbond Electronics Corp. and Nanya Technology Corp. In addition, some wafers from Infineon’s plants in Dresden, Germany, and Richmond, Virginia, will also be processed there. Total investment in that plant is expected to reach US$1 billion over the next 10 years, Infineon said.

The Chinese government has placed an emphasis on attracting foreign investment in western China in recent years. Responding to those calls, foreign chip makers have begun to set up operations in China’s western provinces.

In August of last year, Intel Corp. signed a memorandum of understanding to build a test and assembly plant in the southwestern city of Chengdu, Sichuan province. In addition, On Semiconductor Corp., which makes power management devices, has a joint venture, Leshan Phoenix Semiconductor Co., which runs a test and assembly facility and a chip fabrication plant in Leshan, Sichuan province.

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