Hynix, STMicroelectronics to build chip plants in China

August 19, 2004 – Hynix Semiconductor Inc., a manufacturer of computer memory chips, said it has signed a formal contract to jointly set up two chip plants with European semiconductor company STMicroelectronics NV in China.

The contract was sealed between Hynix and the municipal government of Wuxi, a city in eastern China, the Korean chipmaker said, according to Asia Pulse Pte Ltd.

The US$2 billion project is expected to pave the way for Hynix to get out of its financial troubles and normalize its operations, analysts here said.

The deal calls for Hynix and STMicroelectronics to jointly invest $500 million each to build the two chip plants in Wuxi. The remaining $1 billion will be funded by the Chinese provincial government and local financing, according to Hynix officials.

In the first stage, Hynix and STMicroelectronics will build a $800 million plant capable of producing 8-inch silicon wafers. Later, they will build another $1.2 billion factory for producing 12-inch wafers, the Korean company said.

On Aug. 9, creditors of Hynix approved the project.


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