News Article
WDA recoups financial aid to Welsh chip plant
South Korean memory maker Hynix Semiconductor has agreed to reimburse the Welsh Development Agency (WDA) almost UK£37 million in relation to a failed semiconductor plant in Newport, Wales.
South Korean memory maker Hynix Semiconductor has agreed to reimburse the Welsh Development Agency (WDA) almost UK£37 million in relation to a failed semiconductor plant in Newport, Wales.
The WDA provided a UK£36.65 million grant towards the construction costs of the 100,000m2 plant in the belief that the project would create 6,000 new jobs for the region. But by the time the plant was completed, the semiconductor industry was in the midst of a major downturn, and the facility was mothballed before a single chip was manufactured.
The plant was originally built by memory maker LG to manufacture DRAM chips but Hynix took responsibility for the facility after subsuming the firm in a merger in 1999. Now the company has signed a settlement with the WDA under which the agency will recoup its full investment in the plant.
Hynix has already handed over the land on which the plant is built (worth UK£6.65 million) to the WDA. It has now also transferred the plant and buildings (UK£17 million) to the agency and agreed to pay the WDA UK£17 million.
A spokesman for the Korean chip maker said: "Hynix is extremely disappointed that the changes in the global semiconductor market have meant that it has been unable to progress this major project. However, the repayment of the grant and the return of the site to the public sector has enabled Hynix to withdraw honourably."
The WDA provided a UK£36.65 million grant towards the construction costs of the 100,000m2 plant in the belief that the project would create 6,000 new jobs for the region. But by the time the plant was completed, the semiconductor industry was in the midst of a major downturn, and the facility was mothballed before a single chip was manufactured.
The plant was originally built by memory maker LG to manufacture DRAM chips but Hynix took responsibility for the facility after subsuming the firm in a merger in 1999. Now the company has signed a settlement with the WDA under which the agency will recoup its full investment in the plant.
Hynix has already handed over the land on which the plant is built (worth UK£6.65 million) to the WDA. It has now also transferred the plant and buildings (UK£17 million) to the agency and agreed to pay the WDA UK£17 million.
A spokesman for the Korean chip maker said: "Hynix is extremely disappointed that the changes in the global semiconductor market have meant that it has been unable to progress this major project. However, the repayment of the grant and the return of the site to the public sector has enabled Hynix to withdraw honourably."
