Hynix said the plant in Icheon, 80 kilometres south of Seoul, would produce 20,000 300mm wafers a month.

'The new plant will help Hynix strengthen its competitive edge in the global memory chip market,' the company said in a statement.

The world's second largest maker of dynamic random access memory (Dram) chips for computers has stepped up production of bigger wafers which allow manufacturers to churn out more chips.

Hynix and its European partner STMicroelectronics last month completed the construction of a US$2 billion plant in China to make 200mm wafers this year and 300mm wafers by the end of 2006.

It also established a strategic alliance with Taiwan's ProMOS Technologies in January to produce 300mm wafers.

Hynix saw its business rebounding last year from years of losses through restructuring and asset sales.

Creditors control an 81.4 per cent stake in Hynix after it was rescued by a 3.2 trillion won (US$3.2 billion) bailout package in 2003. But its recovery has increased the value of assets used as collateral, enabling Hynix to refinance its debt.