March 21, 2001 — BEJING — Silicon Storage Technology Inc is set to invest more than $1.6 billion in Shanghai Grace Semiconductor Manufacturing Corp. and also has plans to create a Chinese subsidiary.

According to published reports, the California-based firm will make a “sizable commitment” in GSMC. The exact value of the investment was not available and officials were unavailable for comment.

GSMC, a wafer chip foundry, is expected to produce 50,000 8-inch silicon wafers a month when production begins late in 2002. Construction of the plant, located in Shanghai’s Zhangjiang High-Tech Park began in November.

“GSMC is delighted to have an investor and technology leader like SST in partnership with the development of our fab,” said Winston Wong, chairman and chief executive of GSMC.

Silicon Storage Technology, which is based in Sunnyvale, California, last week also announced plans to create a subsidiary company which will be located in China. The new company will be called SST China and will develop and sell flash memory, ROM/RAM Combo and embedded controller products in the Chinese marketplace. The proposed facility will house design, product and other engineering teams as well as sales, marketing and administrative organizations