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Hynix to invest more into China JV fab


Monday, March 10, 2008

Memory chip giant Hynix Semiconductor Inc will reportedly invest another $260 million in its joint venture with STMicroelectronics in China this year for capacity expansion, according to a Reuters news report today.

This is the second time Hynix has upped its stake in the Wuxi, China-based fab, which was built with an initial investment of $2 billion.  In May 2007, as the result of a separate increase in investment by Hynix, ST’s equity investment dropped to 16.6%, from 33%.

The original ownership percentages were 33% ST, 67% Hynix. After this cash infusion, Hynix’s ownership in the JV will rise to 77.44%, with ST’s ownership percentage at 22.56%, the news report said.

In 2007, Hynix completed a $1.5 billion capacity expansion at the Wuxi facility.

In other Hynix news, Korean newspaper Digital Chosun reported today that the company is seeking to transfer cutting-edge semiconductor technology to ProMOS Technologies, a Taiwanese chipmaker, and has been negotiating the transfer of technology to produce 54-nm DRAMs.

The report says that after Hynix president Kim Jong-kap took office last year, Hynix attempted to transfer the 66-nm technology to ProMOS, but relented after outcries over the technology drain from the country.

Hynix is seeking to diversify its production base, including making products on commission at ProMOS, to cut costs and evade countervailing duties it has to pay if it directly exports goods to the US or Europe, the report continued.

Industry watchers worry that the transfer could lower Korea’s semiconductor competitiveness, and the country has put into law the Industrial Technology Drain Prevention Act, which stipulates that 80-nm or smaller semiconductor technologies are key technologies that the country must protect. As such, Hynix is expected to face barriers to the transfer with Korea’s Ministry of Knowledge-based Economy, the report speculated.

By: DocMemory
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