Hynix to build chip plant in China

Hynix to build chip plant in China

South Korean memory-chip maker Hynix Semiconductor announced Wednesday that it reached an agreement to construct a wafer fabrication plant (fab) to manufacture chips in Wuxi, China.

Hynix did not detail specifics of the deal with Wuxi city authorities other than the company plans to complete construction of the fab by the second half of 2005 and to start production in 2006. Financial details of the project were not disclosed.

Hynix cited a desire to be a leading chip maker in China and low manufacturing costs, among other reasons, for deciding to build a chip plant in China.

China has a growing domestic chip-manufacturing industry led by Semiconductor Manufacturing International Corp. (SMIC) of Shanghai, but only a handful of chip makers have so far decided to build chip-manufacturing plants in China.

One of those companies is Taiwan Semiconductor Manufacturing Co., the world's largest chip maker, which has announced plans to build a fab near Shanghai. That fab is expected to begin production before the end of this year.

Motorola formerly operated a fab in the northern city of Tianjin, but transferred that plant to SMIC last year in exchange for a stake in the Chinese chip maker.

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