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To: niek who wrote (1075)	1/26/2006 1:44:07 PM
From: niek	Read Replies (1) \| Respond to of 43296

STMicroelectronics changes plans with Hynix JV Fab Thursday, 26 January 2006 ImageSTMicroelectronics (STM) has made a major strategic change to its previously disclosed production plans for the Joint Venture (JV) fab with Hynix Semiconductor in Wuxi City, Jiangsu Province, China. Sources told Semiconductor Fabtech that a senior STM executive had said that there were now no plans to ship 200mm fab tools from STM fabs in Europe to start production at the 300mm capable fab currently under construction as part of the investment terms of the JV. STM had previously planned to fabricate chips at the new plant on 200mm wafers to speed the ramp and reduce initial costs for the chips to be sold to customers in China, which is the company's fastest growing market. Hynix would supply the DRAM processing technology for STM as part of its need to have MCP (Multi Chip Package) stacked memories and SiP (System-in-Package) devices for a range of platform solutions to Chinese customers. Hynix had planned to start 300mm production at the new fab by the end of 2006, soon after STM began ramping 200mm wafers at the same facility. It is not clear however, whether the plans to initially ramp a 200mm line will still go ahead, or whether Hynix is now supplying the 200mm processing equipment for STM instead. The sources said that STM has secured 33 percent of the Wuxi fab wafer starts regardless of the wafer size being deployed. The total investment announced for the Wuxi fab was $2 billion US dollars with Hynix funding 67 percent of the cost of the fab and STM providing 33 percent of capital required.