Hynix, ST Build $2B Memory Plant in China

Online staff -- Electronic News, 11/16/2004

After success in their work together on NAND flash process, product development and manufacturing, STMicroelectronics and Hynix Semiconductor today announced they would build a front-end memory-manufacturing facility in Wuxi City, Jiangsu Province, China.

The total investment for the project is planned to be $2 billion, financed by Hynix at 67 percent and ST’s contribution at 33 percent. ST will also contribute $250 million of long-term debt, as well as a financing package from Chinese financial institutions. The companies expect to invest approximately $375 million in 2005 toward this venture.

The companies are in the process of securing the required governmental approvals and financing package.

The facility, to be dedicated to DRAM and NAND flash production, is to include an 8-inch wafer line scheduled to begin volume production in 2006, while a 12-inch manufacturing line would begin volume production in 2007.

Construction is slated to begin early next year on the fab, to include cleanroom space of more than 18,000 square meters, employing about 1,500 people.

With China currently accounting for 14 percent of the worldwide semiconductor market, expected to grow at a compound annual growth rate of more than 20 percent between 2003 and 2008, the companies believe this joint venture will strengthen the respective competitiveness of each. For Hynix, this venture allows the company to secure 300mm manufacturing facilities, and could resolve existing and potential trade issues. Meanwhile, STMicroelectronics said this venture assure the company of access to cost-competitive DRAM products and technology.

“Hynix believes this alliance will be mutually beneficial for each company’s long-term growth,” said Eui-Jei Woo, chairman and CEO of Hynix, in a statement.

“Hynix plans to extend its position in the memory market with the planned fab in China and through diversifying its product portfolio, which includes main memory for high-performance servers, graphics memory, mobile memory, consumer-application memory and NAND flash memory,” he concluded.