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[China Special] Fairchild to Strengthen Footholds in China's Power Market
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Fairchild Semiconductor reappeared on the microelectronics industry scene in 1997 with US$700 million in revenues and a focus on logic, discrete and nonvolatile memory products. By 1999, the company was already well established in China with a business worth more than US$150 million and an aggressive expansion plan that would place China at the forefront of the company's plans for the 21st century.
We extended our technology and applications support with the opening of two new offices in Shanghai and Shenzhen in 1999, and at that time I pledged that Fairchild would continue to invest in China and that we would play a vital role in the development of China's IC industry.
At the end of 2001, I was pleased to be able to deliver on the pledge I made in 1999 and announce plans to construct a new manufacturing and warehouse facility in Suzhou. The factory will be an assembly and test facility for a broad range of logic, discrete and analog packages. The proposed 800,000 sq ft plant will be built in several phases and is a key element of the company's global strategy. The new factory will produce products for both the local China market and for export to the rest of Asia, Europe and the US.
Power Market
The key business opportunity that Fairchild has identified in China is power. Power is at the heart of today's modern electronics systems; significantly, in China power is a very valuable resource. Increasing demand for consumer electronics and home appliances such as air conditioners and refrigerators in China means that more power has to be generated. However, these appliances need to be designed and manufactured so that they meet world-class standards for energy-efficiency.
It is part of Fairchild's plan to widen our regional and worldwide leadership by identifying and providing best-in-class solutions for untapped markets, products and applications that need power regulation and management. Power components are used for a variety of applications in a wide range of industries. These include power management to manage battery power for wireless, handheld and any type of portable equipment; power distribution by switching, converting, and distributing power within computing applications and powering starter/alternator capabilities within automobiles; and power minimization by utilizing low power products to extend battery and power efficiencies.
Fairchild's approach is to expand our addressable markets and sell more power semiconductors into each application. Once we have increased our silicon content in one market, such as China, we utilize our access to customers around the globe to quickly reuse and resell that technology into many other end markets.
Suzhou Facility
The first stage of our new manufacturing facility will be the construction of a US$10 million, two-storey 120,000 sq ft assembly/test facility. A 280,000 sq ft extension will then follow, before the final development of another 400,000 sq ft of factory space. The total investment, including land purchase, construction costs and tooling, is expected to be US$200 million over the next five years.
With the construction of this new facility, Fairchild is ideally placed to be a part of the rapid expansion of China's electronics industry. According to Gartner, China's electronics equipment manufacturing grew 16.1% to US$72.7 billion in 2000, representing 28.1% of Asia-Pacific's total electronics equipment production. This level of growth is expected to continue, with electronics equipment manufacturing in China expected to grow at 13.5% CAGR (compound annual growth rate) from 2000 through 2005, reaching US$137 billion by 2005. At Fairchild we've identified 10 key markets segments that will drive this growth, they are: home appliances, monitors, audio video, charger/adaptor, power supply, telecom infrastructure, PDA, color TV, mobiles phones and PCs.
Today, more than 85% of Fairchild's employees are based in Asia and 68% of total global sales are generated in the region, up from 60% a year ago. China is a key element of our expansion plan for Asia and we expect to more than double our China sales by 2004.
To support this level of growth, we have a clear strategy, which includes: expanding alliances with key design houses to develop systems reference designs; increasing market penetration in the key high-growth market sectors; realigning our product line resources to focus on China; and developing leading edge products for target segments. Fairchild intends to keep expanding in China and we expect to be able to make announcements about new offices and design laboratories within the next year or so.
by Kirk Pond,
President, Chairman and CEO,
Fairchild Semiconductor
(April 2002 Issue, Nikkei Electronics Asia)
We extended our technology and applications support with the opening of two new offices in Shanghai and Shenzhen in 1999, and at that time I pledged that Fairchild would continue to invest in China and that we would play a vital role in the development of China's IC industry.
At the end of 2001, I was pleased to be able to deliver on the pledge I made in 1999 and announce plans to construct a new manufacturing and warehouse facility in Suzhou. The factory will be an assembly and test facility for a broad range of logic, discrete and analog packages. The proposed 800,000 sq ft plant will be built in several phases and is a key element of the company's global strategy. The new factory will produce products for both the local China market and for export to the rest of Asia, Europe and the US.
Power Market
The key business opportunity that Fairchild has identified in China is power. Power is at the heart of today's modern electronics systems; significantly, in China power is a very valuable resource. Increasing demand for consumer electronics and home appliances such as air conditioners and refrigerators in China means that more power has to be generated. However, these appliances need to be designed and manufactured so that they meet world-class standards for energy-efficiency.
It is part of Fairchild's plan to widen our regional and worldwide leadership by identifying and providing best-in-class solutions for untapped markets, products and applications that need power regulation and management. Power components are used for a variety of applications in a wide range of industries. These include power management to manage battery power for wireless, handheld and any type of portable equipment; power distribution by switching, converting, and distributing power within computing applications and powering starter/alternator capabilities within automobiles; and power minimization by utilizing low power products to extend battery and power efficiencies.
Fairchild's approach is to expand our addressable markets and sell more power semiconductors into each application. Once we have increased our silicon content in one market, such as China, we utilize our access to customers around the globe to quickly reuse and resell that technology into many other end markets.
Suzhou Facility
The first stage of our new manufacturing facility will be the construction of a US$10 million, two-storey 120,000 sq ft assembly/test facility. A 280,000 sq ft extension will then follow, before the final development of another 400,000 sq ft of factory space. The total investment, including land purchase, construction costs and tooling, is expected to be US$200 million over the next five years.
With the construction of this new facility, Fairchild is ideally placed to be a part of the rapid expansion of China's electronics industry. According to Gartner, China's electronics equipment manufacturing grew 16.1% to US$72.7 billion in 2000, representing 28.1% of Asia-Pacific's total electronics equipment production. This level of growth is expected to continue, with electronics equipment manufacturing in China expected to grow at 13.5% CAGR (compound annual growth rate) from 2000 through 2005, reaching US$137 billion by 2005. At Fairchild we've identified 10 key markets segments that will drive this growth, they are: home appliances, monitors, audio video, charger/adaptor, power supply, telecom infrastructure, PDA, color TV, mobiles phones and PCs.
Today, more than 85% of Fairchild's employees are based in Asia and 68% of total global sales are generated in the region, up from 60% a year ago. China is a key element of our expansion plan for Asia and we expect to more than double our China sales by 2004.
To support this level of growth, we have a clear strategy, which includes: expanding alliances with key design houses to develop systems reference designs; increasing market penetration in the key high-growth market sectors; realigning our product line resources to focus on China; and developing leading edge products for target segments. Fairchild intends to keep expanding in China and we expect to be able to make announcements about new offices and design laboratories within the next year or so.
by Kirk Pond,
President, Chairman and CEO,
Fairchild Semiconductor
(April 2002 Issue, Nikkei Electronics Asia)
