ST maps strategy to be China’s top chip supplier

March 30, 2006 – Underscoring its desire to ramp up activities in China to grow from the No. 3 semiconductor supplier to No. 1, STMicroelectronics plans to spend another $500 million in the region to build a second backend plant. The new backend facility in Longguan, with startup projected by mid-3Q08 with full capacity of 7 billion units/year, would supplement ST’s existing assembly and test plant in Shenzen.

ST already is investing a 33% minority stake in a $2 billion JV with South Korea’s Hynix Semiconductor for a memory fab in Wuxi. ST also said it is adding a $10 million building to its greater China headquarters in Shanghai.

“Today, we are the number three semiconductor supplier in China and the number two if we exclude microprocessor products. We plan to become the number one, reinforcing our position as a leading player in this market,” said Bob Krysiak, ST’s VP and GM for greater China.

Since 1999, ST’s sales in China have grown at a CAGR of 31%, compared to 24% for China’s semiconductor industry as a whole. The company currently employs around 4000 people there; its backend plant in Shenzhen is one of the largest assembly and test facilities in China.


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