"China has favorable conditions for developing the semiconductor industry and the industry's growth and potential are impressive," Jonathan Ross, senior official with Goldman Sachs' Hong Kong office, its Asia-Pacific regional headquarters, said Sunday at a technology conference in Shanghai.

Ninety percent of Goldman Sachs' investment in Asia has gone to the Chinese mainland in the past two years, according to the company.

Ross noted that the mainland attracts semiconductor manufacturers from Japan, the United States, Singapore, and some European countries due to its huge market potential, low cost, flexible government policies and skilled personnel.

The number of semiconductor designing companies on the Chinese mainland has risen from 20 three years ago to more than 200.

The technological level of the semiconductor industry here has also greatly improved in the last couple of years. Semiconductor Manufacturing International (Shanghai) Corporation (SMIC), a local semiconductor foundry, has launched and produced in volume a fully qualified 0.18um logic technology, which allows the production of a more powerful silicon chip.

A few years ago, local companies had just developed 0.5um to 0.35um logic technologies. And now SMIC has started to develop 0.13um logic technology, its most powerful so far.

"Shanghai has become a center of China's semiconductor industry," Ross said. The city is also China's financial center.

More than US$10 billion has been invested in semiconductor companies in the city so far. The industry's total output value has increased by 30 percent annually in Shanghai, two-thirds of the mainland's total output.

About 80 integrated circuit manufacturers have gathered in Zhangjiang's high-tech park, regarded as Shanghai's Silicon Valley, including SMIC and Shanghai Hua Hong NEC Electronics, a Sino-Japanese joint venture.

(Xinhua News Agency September 24, 2002)