Flash memory maker invests in China foundry

Flash memory maker Silicon Storage Technology Inc. (SST) has invested additional $33 million in China-based Grace Semiconductor Mfg Corp. (GSMC) equity investment. In March 2001, SST invested $50 million in GSMC's Series A financing.

GSMC is the holding company of Shanghai Grace Semiconductor Mfg Corp. (Grace), a deep sub-micron wafer foundry. Grace is a strategic manufacturing partner of SST. The foundry is currently mass producing SST's self-aligned 2G SuperFlash technology at 0.25?m with 0.18?m slated for mass production in the second half of 2004. Proceeds from the Series B financing are expected to be utilized for capacity expansion and investments in leading-edge technology. At this point, the factory is positioned to support the requirements of 0.13?m technology.

Bing Yeh, SST president and CEO, said, "Earlier in 2003, after its equipment installation, Grace brought up our first product vehicle to a respectable yield level in record time. After the full qualification by SST during the fourth quarter of 2003, Grace has demonstrated its manufacturing maturity with the shipment of more than five million SuperFlash products to SST. We expect to ramp our production volume at Grace to more than 3000 wafers per week by the end of 2004. The incremental production output from Grace will allow us to meet the expected strong demand in the DVD player, Bluetooth, digital camera, notebook PC and cellphone markets. This investment is another step in developing SST's presence globally in areas that are strategically important to our long-term goals. We are pleased to be a part of this round of financing and believe that the funds raised will help to support SST's aggressive technology roadmap beyond 0.18?m."