HP invests $100 m. in wafer fabrication plant

SINGAPORE: Hewlett-Packard Co Ltd. said on Friday that it has invested US
$100 million to set up its second wafer fabrication plant in Singapore to
produce advanced inkjet microchips for its printers.

"We're investing US$100 million to bring the facility on line...and
production will start in late 2001 or early 2002," Greg Merten, HP's vice
president and general manager for Imaging and Printing Supplies Operations, told
a news conference.

HP's inkjet cartridge operations are "expected to generate a value-add
of S$2 billion" for the Singapore economy by 2004 when the expansion of the
wafer fab is completed, said Peter Chen, senior minister of state for Trade
& Industry and Education. The computer and printer maker has about 6,000
employees in Singapore.

Merten said the chips, made with the latest JETMOS technology, will be used
locally and shipped to other overseas production sites. He declined to reveal
the Singapore wafer fab's production capacity. HP's first inkjet wafer fab is
located in Corvallis, Oregon. The company has about a 40 per cent share of the
worldwide inkjet printer market.

The Singapore wafer fab, with a processing area of 10,000 square feet, is
housed within the existing HP manufacturing plant at Depot Road in the
southwestern end of the island. "Our inkjet printer business is a very
strong business for HP and continues to have strong growth," Merten said.
"This is in line with our strategy to continue expanding this
business."

The Singapore wafer fab will only produce less than 50 per cent of the inkjet
microchips, with HP outsourcing the remainder to third party wafer fabs, said
Foo Chee Hei, general manager for Inkjet Supplies Manufacturing in Singapore.

"The production of the inkjet cartridges as well as some final assembly
work is also outsourced," Foo said, declining to name any suppliers.
Electronics contract manufacturer Omni Industries , for one, makes inkjet
printers, cartridges and other computer peripherals for HP.

(C) Reuters Limited 2001.