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Infineon Makes China Deal

Infineon Technologies and the China-Singapore Suzhou Industrial Park Venture (CSVC) are setting up a joint venture for the assembly and testing of memory ICs. The agreement provides for the construction of a joint facility in the Suzhou Industrial Park (SIP), 80 km from Shanghai.
Infineon Technologies and the China-Singapore Suzhou Industrial Park Venture (CSVC) are setting up a joint venture for the assembly and testing of memory ICs. The agreement provides for the construction of a joint facility in the Suzhou Industrial Park (SIP), 80 km from Shanghai.


Once completed, the facility will have a maximum capacity of up to 1bn chips a year. The new company will operate under the name Infineon Technologies Suzhou with Infineon holding 72.5% percent and CSVC the remaining 27.5%.


The new facility will be developed in a number of stages. Planned investment over ten years will come to $1bn. Registered capital will be $333mn. Infineon will contribute $241.4mn over the next five years as equity. CSVC will contribute $91.6mn.


The first stages of development include construction of the building, facilities, infrastructure and the first cost-intensive equipment. Any further investment would be mostly required for additional equipment. It is expected that the joint venture will finance this externally.


When operating at full capacity, Infineon Suzhou will employ more than 1000 people.


"With this partnership we are systematically expanding our presence in the future market of China, we will gain access to new customers and aim to capture a 40% share of the market for memory products in China," says Infineon president and CEO Dr Ulrich Schumacher. "Overall, we intend to secure in China a place among the top four in the microelectronics business with a market share of more than 10% within the next five years. By then we will have about 3300 employees in China."


Work on constructing the new facility is scheduled to begin in October 2003 and the site should be ready for the equipment installation by mid-2004. Volume production is due to start in early 2005. The joint venture will start by producing 256Mbit devices in BGA packages.


Wafers for further processing will come primarily from Infineon's collaborative projects with SMIC (Shanghai, China), Winbond and Nanya (both in Taiwan), but shipments from Dresden, Germany, and Richmond, USA, are also planned.



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