Hynix and STMicroelectronics have opened a front-end memory-manufacturing facility in Wuxi City (Jiangsu province, China). The new facility, which will manufacture both NAND flash and DRAM, is the result of the existing collaboration between Hynix and ST. The companies said they will benefit from significant economies of scale, front-row access to the rapidly-growing Chinese market, and their complementary strengths in process and product development.

With this, Hynix will expand its 300mm manufacturing capacity and strengthen its leading position in the world's fastest-growing Chinese semiconductor market, reports Digitimes. Hynix currently holds the number one position of DRAM sales in China with a market share of approximately 47%, based on the most recent data from research firm iSuppli. With the completion of the Wuxi fab, Hynix has another global manufacturing site in addition to its US fab in Eugene, Oregon.

The companies laid the first stone at the Wuxi site in April 2005. There are 550,000-square-meters available at the site, with a clean-room space of 20,000 square meters. Volume production at the 200mm and 300mm manufacturing lines began in July 2006 and October 2006, respectively.

Production of DRAM is in 90nm and 110nm process technologies at the 200mm line and 80nm at the 300mm line. By the middle of next year, the lines will start to produce NAND flash in addition to the current production of DRAM. The 200mm line is today producing 50,000 wafers per month and the 300mm line is expected to have a capacity of 18,000 wafers per month.

The cost was $2 billions for the joint-venture fab, financed with equity from STMicroelectronics and Hynix on a 1/3 - 2/3 basis, respectively, and a financing package from Chinese local institutions and STMicroelectronics. The company employs about 2000 people, the majority of whom have been recruited from the local workforce. Located two hours from Shanghai, the Wuxi location offers access to a large and highly-skilled labor pool and a well-developed infrastructure with room for expansion.

"A joint venture of this magnitude is likely to be the largest of its kind between a Korean and European company", said Carlo Bozotti, president and CEO of STMicroelectronics. "It will bring both partners significant benefits of scale and complementarity. Guaranteed access to cost-competitive DRAM and jointly developed NAND products and technologies reinforces ST's leading position in package-level integration (PLI). By stacking multiple memory chips in a single package, this important technology of PLI allows our customers in China and worldwide to increase memory density and device reliability, while saving space in mobile handsets and other consumer and industrial applications."

"In 2005, the NAND flash market grew faster than any segment in the history of the semiconductor market, driven by a spiraling demand for storage space in mobile phones, digital cameras, and portable audio players", said Mario Licciardello, STMicroelectronics' corporate vice president and general manager of the Memory Product Group. "The ramp up of the 300mm production with 60nm SLC (single-level cell) and MLC (multi-level cell) NAND technology, rapidly moving to 55nm and below, will help ST match this growth and meet our customers' demand for high-performance and cost-competitive memory solutions in the mobile and digital consumer markets."

The DRAM market is expected to grow 24.4% this year, recording revenue of 30.9 billion US dollars, and the NAND flash market is expected to grow 17% in 2006, with revenue of 12.6 billion US dollars, according to the market research company iSuppli.