SMIC, UTAC agree to set up chip fab in Chengdu

Semiconductor Mfg Int. Corp. (SMIC) and Singapore-based United Test and Assembly Center Ltd (UTAC) recently agreed on a joint venture and will set up an assembly and testing facility in Chengdu in Sichuan.

SMIC will own 51 percent of the joint venture, investing $51 million for the new company, while UTAC will hold 30 percent shares and allocate $30 million worth of cash and intellectual properties. The rest of the share will be sold to financial investors and employees.

The facility, which will cover an area of more than 11,000 square-meters, will be based at the Chengdu Special Export Manufacturing Zone. It is slated to begin mass production in the fourth quarter of this year. Investment for the first phase is expected to reach $175 million.

The joint venture will serve as another assembly and testing provider for SMIC and will initially concentrate on its existing clients.

"We are pleased to find a solid partner in UTAC which has been a strategic supplier to SMIC shortly after they first set up their Shanghai facility. UTAC established their technical and services credentials very quickly and is an ideal partner for us," says Richard R. Chang, SMIC chairman.

"Having been working with SMIC for over a year, we have seen first-hand the strength and the determination of the company to make a success of its endeavors. SMIC has been a key customer to UTAC and this joint venture takes the relationship to another level," says Lee Joon Chung, president and CEO of UTAC.