Under the plan, STMicroelectronics (Geneva), which is expanding its reach into China, will transfer its 300-mm copper technology to HHNEC (Shanghai), according to a new report from Piper Jaffray Inc., an investment banking firm.

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 200-mm fab in Shanghai. In recent times, HHNEC said it has been planning to build a 300-mm fab as well.

And the company is apparently working with STMicroelectronics on the 300-mm front. “HHNEC is in the process of finalizing negotiations on technology cooperation with STMicro, who will transfer the 300-mm copper technology to HHNEC's planned 300-mm fab,” said Bill Lu, an analyst with Piper Jaffray, in the report issued on Monday (March 13).

“We believe HHNEC has secured [$400-to-$500 million] in funds from the Chinese government, which will be sufficient to build up the initial pilot line for manufacturing,” Lu said in the report. “Thus we expect company to issue initial system orders in the range of [2,000 wafer starts per month] in C2Q ‘06, then follow up with orders of another [3,000-to-5,000 wafer starts per month] in C3Q ‘06 to ramp the total capacity to [5,000-to-7,000 wafer starts per month] by end of 2006 or early 2007.”

Samuel Ni, a market analyst for the SEMI trade group in China, said that the 300-mm fab is own and operated by Huahong International Ltd., a subsidiary of Shanghai Hua Hong Group Co. Ltd.

HHNEC is a separate company, but the 200-mm foundry provider is also part of the Shanghai Hua Hong Group, Ni said. “HHNEC and Huahong International are financially independent entities,” Ni said. “Huahong International [is] a company that is basally government-owned, but registered as a foreign company.”

In any case, HHNEC has been more aggressive in recent time, especially when it last year hired a new group executive. In August David N. K. Wang, a long-time executive of Applied Materials Inc., resigned from the chip-equipment giant and was named chief executive of Chinese semiconductor conglomerate Shanghai Hua Hong Group Co. Ltd.

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

A line for processing 8-in. wafers is scheduled. A line for 300-mm diameter wafers is due to begin production in late 2006.

STMicroelectronics is planning to spend $500 million on a wholly-owned test, marking and packaging (TMP) facility in Shenzhen.

By: DocMemory
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