The second phase of Hua Hong Semiconductor's 12-inch wafer fab expansion in Wuxi held a production ceremony on December 10. This event garnered significant attention following the recent announcement of collaboration between STMicroelectronics (STM) and Hua Hong to produce 40nm microcontrollers (MCUs) locally in China by 2025.
Hua Hong specializes in specialty technologies and analog IC manufacturing, aligning well with STM's MCU products. The 40nm process is also favored by STM for local foundry services, focusing on domestic manufacturing and supply within China. This partnership is expected to help STM reduce overseas costs while closer to the Chinese market.
According to Hua Hong, the second phase of the 12-inch production line has been completed 100 days ahead of schedule, entering the operational stage. This facility in Wuxi serves as an important base for Hua Hong, expanding beyond its main manufacturing hub in Shanghai into the Yangtze River Delta region.
Since construction began in March 2018, this site has undergone two infrastructure developments and two rounds of capacity expansions, with total investments exceeding US$10 billion. The second phase will focus on producing automotive-grade chips, achieving a monthly capacity of 83,000 12-inch wafers. Construction commenced in June 2023, completing 100 days earlier than originally planned.
Industry analysts suggest that the recent partnership between STM and Hua Hong has catalyzed the acceleration of Hua Hong's factory development, paving the way for more international partners to outsource their mature process integrated circuits (ICs) needed within China.
Suxin Zhang, chairman of Hua Hong Group, stated that the semiconductor industry is akin to a never-ending marathon. To adapt to the evolving landscape of the IC sector, Hua Hong aims to showcase its commitment moving forward. Junjun Tang, president of Hua Hong Semiconductor, emphasized that the company will continue to deepen its dual-engine strategy focused on specialty ICs and power components, honing in on specialized process platforms.
The automotive chip market in China remains highly coveted among major chip manufacturers. In addition to STM, another automotive chip giant, NXP, revealed plans to establish a local production base in China, seeking ways to serve customers requiring local production. Currently, NXP operates testing and packaging facilities in Tianjin but lacks front-end manufacturing capabilities.
Furthermore, Infineon Technologies recently disclosed that it is localizing the production of related ICs in China at the requests of Chinese clients for localization of critical components that are difficult to replace, and Infineon does not rule out transferring some products to contract manufacturers in China. Infineon already has back-end facilities in China, which are addressing concerns over supply security.
