[lbo-talk] Infineon opens chip plant in China

uvj at vsnl.com uvj at vsnl.com
Sat Sep 25 09:55:51 PDT 2004


The Economic Times

Thursday, September 23, 200

Infineon opens chip plant in China

REUTERS

FRANKFURT: German chipmaker Infineon opened a $1-billion memory-chip joint venture in China on Thursday, advancing its growth strategy in the world's second-biggest market for personal computers.

The joint-venture plant near Shanghai, where memory chips will be assembled and tested, will have a maximum capacity of 1 billion chips per year and employ 1,000 people.

Infineon, the world's fourth-biggest memory chip maker by sales, owns 72.5 per cent of the venture, which it founded last year, with business development company China-Singapore Suzhou Industrial Park Venture owning the rest.

The factory will produce its first chips at the end of this year and begin volume production early next year.

Infineon is to spend $241.1 million in the plant over the next five years, with its Chinese partner investing $91.6 million. The rest of the $1 billion will be financed through external debt raised by the joint venture over the next nine years.

Infineon said last year it would invest $1.2 billion in China by 2007.

"The new facility will be developed in a number of stages as dictated by growth and trends in the global semiconductor market," Infineon said in a statement.

China's chip market is projected to expand to $38 billion annually by 2006 from $31 billion this year, while the global market is expected to shrink slightly over the same period, according to market research firm IC Insights.

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