* Long-serving SMIC CEO Richard Chang resigns

* Industry veteran David Wang to take over

* Move may pave way for industry consolidation, analysts say

* SMIC to settle lawsuit with TSMC in cash, shares - source (Adds settlement with TSMC in para 6-9)

By Doug Young

HONG KONG, Nov 10 (Reuters) - SMIC (0981.HK: Quote, Profile, Research), China's largest contract chipmaker, said its long-serving CEO has been replaced by another industry veteran, in a move that could pave the way for consolidation in China's struggling chip sector.

SMIC's founder Richard Chang had been replaced as CEO by David Wang effective immediately, the company said in a statement to the Hong Kong Stock Exchange on Tuesday.

Wang's strong industry background, as a former executive at Applied Materials (AMAT.O: Quote, Profile, Research), the world's top supplier of chipmaking equipment, and more recently as head of another major Chinese chipmaker, Huahong NEC, could be setting the stage for much needed industry consolidation, analysts said.

"This will likely be a precursor for a merger of the two companies, and David Wang will take charge after the merger," Nomura analyst Rick Hsu said, referring to SMIC and Huahong NEC. "A new person will hopefully bring in a new culture, a new mission and new results."