Hynix Semiconductor, ST Microelectronics to Build Semiconductor Fab in China

by Anton Shilov
08/11/2004 | 03:58 PM

Creditors of Hynix Semiconductor approved Tuesday a plan of the South Korea-based chipmaker to build a semiconductor foundry in China in collaboration with ST Microelectronics.

Hynix Semiconductor of South Korea and ST Microelectronics of France decided to expand their relationship on flash memory with a joint-venture DRAM memory fab in Jiangsu Province, China. The total amount of investments is expected to achieve approximately $2 billion; both companies will invest $500 million each, the remaining $1 billion will be provided by Chinese government authorities and financial institutions in Jiangsu Province.

Hynix and ST Microelectronics said that the foundry would initially use 200mm wafers, but would add lines to utilize 300mm wafers at a later date. Expected output of the new fab is unclear.

Creditors and executives of Hynix Semiconductor said that the aim to establish foundry in China is a foundation for the memory maker’s long-term survival and success.

Analysts in Taiwan believe that after the USA and the EU slapped anti-dumping charges on Hynix’s products the company tremendously needs to have manufacturing based outside of Korea, which will allow the DRAM maker to supply products to European countries and the USA with “Made in China” label paying no additional tariffs.