The partnership could finally pull the Tianjin fab out of limbo. Originally conceived in the early 1990s, the project was supposed to be the centerpiece of a $1.9 billion Motorola investment in the Tianjin area and emerge as China's most advanced fab.

Yet ever since Motorola announced its fab-lite strategy, rumors have spread that the company wanted to sell the Tianjin fab and Motorola officials acknowledged that they had downsized their expectations of its importance in their shrinking manufacturing operations.

Over the past several months, Motorola has hinted that it wanted to find a partner for the 8-inch wafer fab, which started ramping up in mid-2001 but is behind initial production targets. Motorola has blamed the delay on poor market conditions.

SMIC has often been mentioned as a potential partner, and Motorola has acknowledged talks with the Shanghai company. On Monday, Motorola officials declined to comment on the fab's status. SMIC officials did not answer requests for comment.

Such a deal would make sense for both parties, giving Motorola someone to help share the cost of equipping MOS-17 and SMIC another source of technology expertise as well as additional capacity. Currently, SMIC is aggressively ramping up three fabs -- mostly for memory products -- and building another in Beijing.

By: DocMemory
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