Chartered secures $610M in additional 300-mm fab funding

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 5/18/2007

To support the phase 2 ramp of its first 300-mm wafer fab, Fab 7, Singapore-based dedicated wafer foundry Chartered Semiconductor Manufacturing Ltd. reported Thursday that it has secured $610 million in additional funding to be used for semiconductor manufacturing equipment.

Export-Import Bank of the U.S. (Ex-Im Bank) guaranteed the $610 million loan, which was approved by the bank’s board of directors on Wednesday.

The loan will finance U.S. exports of wafer fabrication equipment to expand Chartered’s Fab 7 facility in Singapore.

Chartered said it will use the financing to buy U.S.-manufactured equipment from Applied Materials, Novellus Systems, LAM Research, Varian Semiconductor Equipment, KLA-Tencor and others.

JPMorgan Chase Bank is the guaranteed lender on the transaction.

When fully completed, Chartered said Fab 7 will be able to fabricate up to 45,000 300-mm non-DRAM wafers per month on 90- and 45-nm process technology over the life of the project.

Ex-Im Bank chairman and president James H. Lambright said in a statement, “This export sale will help create and sustain jobs at the U.S. exporting companies involved in the project and their sub-suppliers throughout the country.”

Also, George Thomas, senior VP and CFO of Chartered said, “[This] announcement follows the $653 million term-loan facility we signed with Ex-Im Bank in 2004 and have been utilizing for our capacity expansion. This new financing will help us further build the capacity that is needed to support our customers in the U.S. and elsewhere in the world.”

The Ex-Im Bank financing is a corporate finance transaction, with Chartered being the primary source of repayment.

Ex-Im Bank is an independent U.S. government agency that assists in financing the export of U.S. goods and services to markets around the world through export credit insurance, loan guarantees, and direct loans. In fiscal year 2006, Ex-Im Bank authorized over $12.1 billion in transactions supporting an estimated $16.1 billion in U.S. exports.

The credit facility is divided into two tranches and has an availability period of between three to five years. Each tranche will be repaid over a period of five years.