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Infineon, Samsung ramp China capacity

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Infineon Technologies and the China-Singapore Suzhou Industrial Park Venture Co. (CSVC) are setting up a joint venture for the assembly and testing of backend memory ICs.

Under the agreement, both partners will construct a joint facility in the Suzhou Industrial Park (SIP), 80 km west of Shanghai. Once completed, the facility will have a maximum capacity of up to one billion chips a year. The new company will operate under the name Infineon Technologies Suzhou Co, with Infineon holding 72.5 percent of the company and CSVC the remaining 27.5 percent.

Infineon will contribute US$ 241.4 million ($359.7 million) to the project over the next five years, while CSVC will contribute US$ 91.6 million ($136.5 million). Any further investment would be mostly required for additional equipment purchases, although it is expected the joint venture will finance this externally, according to Infineon CEO Dr. Ulrich Schumacher.

"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 percent share of the market for memory products in China," Schumacher says. "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 percent within the next five years. By then we will have about 3,300 employees in China."

Continuous growth in frontend capacities—including the introduction of 300 mm technology, and cooperation ventures with Winbond, SMIC and Nanya—necessarily entails an expansion of capacity for backend production, Schumacher adds. 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 slated to commence in early 2005.

The joint venture company will start by producing 256 Mbit devices in BGA packages. Infineon is distributed in Australia by Ramelec Electronics and Insight Electronics .

In other Chinese production news, Samsung Electronics will invest 20 trillion won ($25.2 billion) in assembly lines for Thin Film Transistor-Liquid Crystal Display (TFT-LCD) products in Tangjeong, Asan, South Chungcheong Province, by 2010, the provincial government says.

Samsung will begin construction of seventh-generation TFT-LCD assembly lines by the end of July so production can begin in early 2005, a spokesman for South Chungcheong Province said in a statement.

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