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Hynix, ST open joint memory fab in China

Posted: 13 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Hynix? STMicroelectronics? wafer? semicon? memory IC?

STMicroelectronics (ST) and Hynix Semiconductor Inc. recently inaugurated their joint front-end memory foundry in Wuxi, mainland China. The $2 billion joint-venture fab will manufacture DRAM and NAND flash memories.

The facility is financed with equity from ST and Hynix on a one-third, two-third basis, respectively, as well as a financing package from China's local institutions and ST. The joint-venture company employs about 2,000 workers, the majority of whom have been local recruits.

"A joint venture of this magnitude is likely to be the largest of its kind between a Korean and European company," said Carlo Bozotti, president and CEO of ST. "It will bring both partners significant benefits of scale and complementarity."

Boosting production
Construction of the Wuxi fab began April 2005. It is set on a 550,000m? site area with a clean-room space of 20,000m?. Volume production at the 8-inch and 12-inch manufacturing lines began in July and October, respectively. Current production of DRAM employs 90nm and 110nm process technologies, at the 8-inch line and 80nm at the 12-inch line. By mid-next year, the lines will start producing NAND flash.

The 8-inch line has a monthly production of 50,000 wafers while the 12-inch line is expected to generate at capacity 18,000 wafers per month. The split among products and memory densities will depend on market conditions.

The fab is expected to accelerate ST's advancement in the NAND flash market, as well as provide high-performance, cost-competitive DRAM chips for system embedded solutions, stacked with flash memories.

"In 2005, the NAND flash market grew faster than any segment in the history of the semiconductor market, driven by a spiraling demand for storage space in mobile phones, digital cameras, and portable audio players," said Mario Licciardello, corporate VP and general manager of the memory product group at STMicro. "The ramp up of the 12-inch production with 60nm SLC (single-level cell) and MLC (multi-level cell) NAND technology, rapidly moving to 55nm and below, will help ST match this growth and meet our customers' demand for high-performance and cost-competitive memory solutions in the mobile and digital consumer markets."

The fab is also expected to expand Hynix's 12-inch manufacturing capacity and strengthen its position in the China semiconductor market. Hynix, which has another fab in Oregon, currently holds the number one position of DRAM sales in China with a market share of approximately 47 percent, based on the most recent data from iSuppli.

"Completion of the Wuxi fab would have not been accomplished without collaboration with ST and support from Wuxi," said Eui-Jei Woo, Chairman and CEO of Hynix. "Through the joint-venture company, Hynix believes the cooperative relationship between ST, Wuxi, and Hynix will be further strengthened, and the new fab will be mutually beneficial for each company's long-term growth. I expect Wuxi fab will be the solid footing for Hynix to be a global memory manufacturer."

"With the completion of the Wuxi fab, Hynix has established a global manufacturing network that connects Korea, the United States and China," said O. C. Kwon, senior VP of strategic planning at Hynix Semiconductor and chairman of Hynix-ST Semiconductor Ltd. "The joint-venture company will be a firm base for Hynix's long-term competitiveness."

Market trends
According to the market research company iSuppli, the DRAM market is expected to grow by 24.4 percent this year, recording revenue of 30.9 billion dollars. Moreover, the NAND Flash market is expected to grow by 17 percent this year, with revenue of 12.6 billion dollars.

The China market, touted as the world's fastest growing semiconductor market, currently accounts for about 15 percent of the worldwide market. Forecasts project the China market to become the world's largest, representing more than one-fourth of the global semiconductor market by 2008.

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