China Resources to build US$1.2b Wuxi chip plant
State-owned conglomerate China Resources (Holdings) will invest US$1.2 billion to expand its semiconductor production in Wuxi, Jiangsu province, and move up the value chain.
The company will build a plant in Wuxi New District to produce the more highly valued eight-inch computer wafers, said the Hong Kong-registered firm's chairman, Song Lin.
It will allocate US$380 million to acquire equipment from South Korea's Hynix Semiconductor, the world's second-largest memory chipmaker.
Mr Song said the projected production capacity of the new plant, with a registered capital of US$500 million, would be 60,000 wafers per month.
Its Hong Kong-listed subsidiary China Resources Logic has the capacity to produce a total of 72,000 six-inch wafers a month at a factory in Wuxi and another in Beijing.
'The microelectronics business is always a key activity for the group and I believe this project will bring a new chapter not only to our business but also to the city's target to be a silicon valley of the mainland,' Mr Song said.
The project was one of 11, worth a total of HK$12.38 billion, signed by the Wuxi government with Hong Kong companies yesterday for new high-technology industrial works.
Wu Fengfeng, a director of the Wuxi City Bureau of Foreign Trade and Economic Co-operation, expected the wafer plant to break ground by the end of this year and to go on stream in the first half of next year.
In other deals, Hong Kong-listed property developer Tian An China Investments signed a preliminary agreement with the government to invest HK$1 billion to develop a high-technology park.
Another Hong Kong-listed investment firm, First Shanghai Group, also signed an agreement to put 150 million yuan in the New District to develop office buildings for software projects.
The city, which had a GDP of 330 billion yuan last year, was trying to transform itself from a labour-intensive and resources-gulping economy into one founded on services and high-technology industries, said Yang Weize, the city's party chief.
STMicroelectronics, Europe's biggest chipmaker, built a US$2 billion joint chip plant with Hynix in Wuxi in 2004.
Earlier this summer, Wuxi's Tai Lake was plagued with severe algal blooms, sparking criticism of the city government, and demands for intensified efforts to battle worsening water pollution in the nation.