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ST expands China reach with HHNEC

Posted: 17 Mar 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Mark LaPedus? STMicroelectronics? ST? Shanghai Hua Hong NEC Electronics? HHNEC?

Shanghai Hua Hong NEC Electronics Co. Ltd (HHNEC) continues on its quest to build a 300mm fab and is reportedly working with a new and surprising partner, STMicroelectronics Inc. (ST), according to an analyst. Under the plan, ST will transfer its 300mm copper technology to HHNEC, said the new report from investment banking firm Piper Jaffray Inc.

For some time, HHNEC, a joint foundry venture between Japan's NEC Corp. and the Chinese government, has been making chips on a foundry basis within its aging 200mm fab in Shanghai. In recent times, HHNEC said it has been planning to build a 300mm fab as well.

On the other hand, ST has been expanding its reach in China. Work has begun on a memory manufacturing wafer fab in Wuxi City, which is a joint-venture between ST and Korea's Hynix Semiconductor Inc. When completed, the Wuxi fab is scheduled to manufacture both DRAM and NAND flash memories as an extension to an existing manufacturing relationship between Hynix and ST.

"We believe HHNEC has secured $400-$500 million in funds from the Chinese government, which will be sufficient to build up the initial pilot line for manufacturing," said Bill Lu, an analyst with Piper Jaffray in the report. "Thus we expect the company to issue initial system orders in the range of [2,000 wafer starts per month] in C2Q 2006, then follow up with orders of another [3,000-to-5,000 wafer starts per month] in C3Q 2006 to ramp the total capacity to [5,000-to-7,000 wafer starts per month] by end of 2006 or early 2007."

A line for processing 8-inch wafers is scheduled while a line for 300mm diameter wafers is due to begin production in late 2006. ST is reportedly planning to spend $500 million on a wholly-owned test, marking and packaging facility in Shenzhen.

- Mark LaPedus
EE Times

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