Doubts surface over Beijing chip plant

June 14, 2006 – Efforts to build a third chipmaking plant in Beijing, China, reportedly have hit a snag due to questions about funds being raised by Taiwanese-led supporters.

Earlier this year, Samoa-registered holding company Fullcomp International Investment proposed to build a $300 million 200mm fab in Beijing with eventual capacity of 30,000 wafers/month, and would begin construction sometime in April. Beijing city government and suburban Linhe Industrial Development Zone reportedly promised “substantial support,” including help building the fab as well as the surrounding land, together worth about $100 million, according to the Financial Times.

However, a new FT/ report indicates that Fullcomp hasn’t been able to raise funds overseas or even locally, a condition insisted by the government before it injects public funds into the project. Fullcomp chairman Leo Wu indicated obtaining funds was not an issue, and the delays were caused by completion of an environmental impact report.

Beijing is home to SMIC’s 300mm fab and a smaller facility operated by Capital Iron and Steel. Other plans to build chipmaking facilities have fallen through recently, noted the FT report, including plans by South Korea-based LMNT and US semiconductor firm SPS. The area is considered dry, dusty, and short of power, whereas chipmaking operations require ample water and sufficient power, as well as tightly-maintained cleanrooms.


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