Intel-Backed China Foundry In Limbo

SAN FRANCISCO — Nanotech Corp., the Chinese silicon foundry hopeful that was started with help from Intel Corp., is in limbo and close to going under, according to an analyst.

In 2004, Intel (Santa Clara, Calif.) and Nanotech struck a deal on the transfer of manufacturing technology and equipment, believed to be the first such deal that the CPU giant made in China.

Intel licensed 0.35- and 0.25-micron CMOS process technology to Nanotech, based outside of Shanghai in Changzhou, Jiangsu Province. Intel also helped train Nanotech staff and sell enough 200-mm wafer equipment to the firm to produce 15,000 wafers per month. Other details, such as whether Intel took cash or an equity stake as payment, could not be confirmed.

But Nanotech's prospects appear to be dim, as the company's key management has resigned from the startup, said Samuel Ni, manager of market research at SEMI China (Shanghai), part of the Semiconductor Equipment and Materials International (SEMI) trade group (San Jose, Calif.)

"[Nanotech] is still there, but there are no people at the company," Ni said during an interview at a SEMI press event on Monday (July 10).

Nanotech's "technology has no backing," he added.

Following an 11.3 percent decline in 2005, sales of semiconductor capital equipment will grow 18 percent to $38.8 million in 2006, according to the mid-year forecast by global semiconductor association SEMI, presented at the Semicon West exposition here Monday.