Shanghai Grace Semiconductor broke ground on its first wafer fabrication plant in Zhangjiang Hi-Tech Park, Shanghai, in November 2000. The project was reported as a roughly US$1.6 billion, 8-inch submicron fab, with production originally targeted for 2002. That schedule was not met: the company began trial production in September 2003. The story is historical, not a 2026 construction announcement.
What happened at the groundbreaking?
The groundbreaking ceremony took place around November 18, 2000, in Zhangjiang Hi-Tech Park in Shanghai’s Pudong area. EE Times reported the event on November 20. The ceremony marked the start of construction, not the start of chip production. EE Times’ contemporary report described the facility as Shanghai Grace Semiconductor Manufacturing Corp.’s initial fab.
What did Grace plan to build?
Contemporary accounts put the planned investment at about US$1.6 billion; People’s Daily Online gave a more specific figure of US$1.63 billion. The facility was designed for 8-inch (200mm) wafers and submicron manufacturing. Some reports described its initial processes as 0.25 micron and finer. These were plans announced around the groundbreaking, not proof of the plant’s eventual output or capabilities.
| Item | What was reported |
|---|---|
| Planned investment | About US$1.6 billion in the EE Times report; US$1.63 billion in a contemporaneous People’s Daily Online account. |
| Wafer size | 8 inches (200mm). |
| Process technology | Submicron, with other contemporary descriptions specifying 0.25 micron and finer. |
| Production schedule | Production was targeted for 2002, with pilot production expected in the first quarter of that year. |
| Initial full-operation capacity target | About 50,000 8-inch wafers per month, as a planned target. |
The capacity number was a target for full operation, not a demonstrated monthly production result. Later announcements used different figures for staged expansion, which are best read as plans for different phases rather than as verified output.
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Who was behind the venture?
Grace was associated with Jiang Mianheng, a senior Chinese Academy of Sciences official and son of then-President Jiang Zemin. Winston Wang, son of Formosa Plastics chairman Y.C. Wang, was identified as a leading executive and the company’s president. Their connections drew attention, while reporting at the time noted that official Chinese media handled Jiang Mianheng’s corporate role cautiously. The South China Morning Post’s November 2000 account describes that political and media context.
Those connections do not, by themselves, establish that the fab was government-owned or personally financed by Jiang Zemin. In a March 2001 interview, Grace vice chairman Nasa Tsai said the company had no Chinese or Taiwan-based investors and that its initial capital came from U.S., European and other Southeast Asian investors. That is an attributed company statement, not a settled account of every source of institutional or political support. EE Times reported Tsai’s claim.
What technology and products were planned?
Grace reportedly licensed submicron integrated-circuit technology from Japan’s Oki Electric Industry. Contemporary coverage described plans to manufacture both memory and logic products, including DRAM, SRAM, flash memory, microprocessors and gate-array products. Intended markets included computers, telecommunications equipment, consumer electronics and IC cards.
Submicron and 0.25-micron processes were commercially significant in 2000. They should not be mistaken for advanced-node technology by 2026 standards; the project is better understood as an effort to establish large-scale wafer manufacturing using technology relevant to its time.
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Why did the project matter to Shanghai and China?
Grace was part of Shanghai’s early effort to build a semiconductor cluster around wafer fabrication, chip design and related suppliers. Zhangjiang was attracting other major fab investments, including SMIC-related projects, as policymakers sought to expand China’s domestic manufacturing capabilities and move beyond lower-value electronics assembly. A Washington Post report from 2001 placed the investment within China’s wider attempt to cultivate chipmakers. The National Academies’ account of China’s semiconductor programs likewise discussed Grace among efforts to establish device manufacturers and design centers.
- Manufacturing capacity: The proposed fab would add domestic wafer-fabrication capability.
- Technology and capital: The project combined international investment and licensed technology with Shanghai’s industrial-development ambitions.
- Cluster development: A fab could support demand for local chip design, packaging, testing and materials businesses, though the groundbreaking itself does not establish how much those surrounding industries ultimately developed.
What happened after the 2000 announcement?
The original 2002 production target was missed. China.org.cn reported that trial production began on September 23, 2003, nearly three years after the groundbreaking. A CENS report that month said the facility had been inaugurated and reported a US$1.63 billion initial investment.
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| Milestone | Date or target | What the report establishes |
|---|---|---|
| Groundbreaking | November 18, 2000 | The ceremony was reported for the initial fab in Zhangjiang. |
| Original production forecast | 2002 | A planned schedule, not an achieved start date. |
| Trial production | September 23, 2003 | China.org.cn reported that trial production began. |
| Staged capacity target | 27,000 8-inch wafers per month by the end of 2004 | A target reported by CENS, not verified output. |
| Longer-term capacity target | 100,000 wafers per month by 2006 | A company plan that included a proposed 12-inch line, as reported by CENS and China.org.cn. |
Later coverage also said Grace had developed a 0.15-micron process and planned to introduce 0.13-micron production. These are reported development and introduction plans; the available milestones do not establish the facility’s actual long-term production volume or whether every expansion target was achieved. China.org.cn’s September 2003 report and CENS’ report on the inauguration and expansion plans provide the later milestones.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to read the original “new fab” report
“New” referred to a proposed facility in the November 2000 report. The most reliable distinction is between the ceremony, the project’s announced specifications, and subsequent operational milestones: construction began in 2000, the initial production forecast pointed to 2002, and trial production was reported in 2003. Capacity figures were targets at specific stages, not interchangeable measures of realized output.
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