Shanghai to invest $658.7 mn in GSMC, HHNEC

TAIPEI: The municipal government of Shanghai, in China, has decided to invest 4.5 billion yuan (US $658.7 million) in a new 12-inch (300mm) wafer fab, which is to be set up as a joint venture of Grace Semiconductor Manufacturing Corporation (GSMC) and Hua Hong NEC (HHNEC).

Industry sources in China said the new fab – which will be to be located at the Zhangjiang Hi-Tech Park in Shanghai – is likely to need a total investment of 14.5 billion yuan.

The joint venture, according to sources, could be the precursor to a merger between Grace Semiconductor Manufacturing Corporation and Hua Hong NEC.

Speculations about a merger of the two companies have been doing the rounds in China’s foundry industry for a long time.

While, Hua Hong NEC (HHNEC) supplies memory, mixed signal and logic processes ranging from 0.35- to 0.13-micron, Grace Semiconductor Manufacturing Corporation (GSMC) is engaged in making embedded non-volatile memory, as well as high-voltage and low-leakage processes with technologies down to 0.13-micron.

The two companies had come close to a deal in 2009, according to reports. In a statement, Semiconductor Manufacturing International Corporation (SMIC), the top foundry chipmaker based in China, remarked that it welcomes the joint venture by Grace Semiconductor Manufacturing Corporation and Hua Hong NEC. The SMIC, based at the Zhangjiang Hi-Tech Park in Shanghai, operates three 8-inch fabs.