November 17, 2004 – The total investment planned for the STMicroelectronics and Hynix Semiconductor joint-venture project to build a front-end memory-manufacturing facility in China is US$2 billion, said the companies. It will be financed with equity from both partners (Hynix 67%, ST 33%), US$250M of long-term debt from ST, as well as a financing package from Chinese local financial institutions, which will involve debt and a long leasehold.

ST and Hynix are in the process of securing the required governmental approvals and financing package. In 2005, the equity investment from ST and Hynix is expected to reach around US$375 million, split on a 1/3-2/3 basis. According to the companies, the joint venture is a extension of the successful NAND Flash process/product development and manufacturing relationship between the companies.

Construction of the leading-edge fab, with a cleanroom space of more than 18,000 sq. m., is slated to begin early next year.

When complete, the fab will employ approximately 1500 people and will initially feature two manufacturing lines: an 8-in. wafer line is scheduled to begin volume production in 2006, while a 12-in. wafer line will begin volume production in 2007. At capacity, each line is expected to produce 20,000 wafers/month.