March 20, 20001 — SALT LAKE CITY — Daw Technologies is moving ahead with plans to form a joint venture company that will focus on integrated cleanroom design, engineering, construction and manufacturing services in China.

The U.S. cleanroom manufacturer has signed a letter of intent along with China-based Eleventh Design & Research Institute, China West Investment, and Sichuan Provincial National Investment Management Corporation. The deal should be finalized in the next few months and officials say they hope to begin generating revenue by the end of the year.

The new company will focus on cleanroom systems and components for the electronics, pharmaceutical and medical device industries. Part of the attraction of establishing the company in China is that country’s recent efforts to establish itself as the Asian center of manufacturing, officials said.

According to industry statistics, China has outspent Malaysia on semiconductor fabs in 1999 and 2000 and is on pace to surpass Singapore in capital spending. China’s capacity for 8-inch wafers is expected to increase by 174,000 units in 2004 and plans to eliminate chip tariffs by 2003.

“The cleanrooms market in China is growing at a different rate than, and is not subject to the industry cycles of, other geographic markets,” said Michael J. Shea, president of Daw technologies. “With the softening of fabrication development in the U.S. semiconductor industry, as well as China’s assured status in the World Trade Organization, this is a great time to look for international manufacturing opportunities.”

Shea said the venture will also serve as a springboard into the rest of Asia.