China’s Grace gets $90M infusion

Grace Semiconductor Manufacturing has received $90 million in funding from a Hong Kong businessman, to help expand its R&D for leading-edge chipmaking technologies and pave the way toward an initial public offering in 2005.

The company did not indicate how much ownership stake would be taken by Li Ka-shing, chairman of Hong-Kong companies Cheung Kong (Holdings) Ltd. and Hutchison Whampoa Ltd. Grace already has ties to powerful entities, having been cofounded by Jiang Mianheng, son of ex-president Jiang Zemin.

Grace originally planned to raise $1.5 million in a dual IPO in Hong Kong and New York, but a market slowdown forced it to postpone the offering until next year and reduce the value to $0.7-$1.0 billion.

Grace has a pair of fabs with output of 25,000 200mm wafers/month, utilizing 0.5-0.15-micron process technologies through Japanese partners, and reportedly is in the final stages of talks with an unnamed US chipmaker to transfer development of 0.13-micron process technologies, with test production beginning by year’s end and volume runs by 2H05.


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