Silicon Magic plans $2b-chip plant in HK

By : |July 14, 2001 0

HONG KONG: Silicon Magic Corp., a US-based maker of specialty memory chips,
plans to invest $2 billion in a semiconductor plant in Hong Kong, a company
spokeswoman said on Friday. The plant would produce Silicon Magic-designed
memory chips for non-personal computer devices such as personal digital
assistants, MP3 players, and mobile telecommunications devices.

Such specialty dynamic random access memory (DRAM) chips are expected to be
in high demand as mobile Internet applications gain momentum and command higher
prices than conventional PC DRAM chips, which are suffering from slumping

The company, founded in 1994 in Sunnyvale, California, also supplies embedded
DRAM system-on-chip products, and lists Japanese electronics giants Toshiba Corp
and Oki Electric Industry Co among significant shareholders. It currently does
not operate its own "fab", or semiconductor fabricating plant, but
relies on other foundry firms to produce its chips.

The spokeswoman said the firm planned to import about 1,000 overseas
engineers to staff the plant, and is now surveying sites in Hong Kong’s New

Many of the staff would likely come from China. The Hong Kong government has
set up a new program to attract technology talent from the mainland, while
Taiwan, Asia’s largest chip producer, does not allow workers to be imported from

The fab, which would produce chips from state-of-the-art 12-inch wafers,
would likely open in 2004, after the semiconductor industry’s current downturn
ends, the Silicon Magic spokeswoman said.

She added that about half of the project’s $2 billion cost, about the going
rate for a 12-inch chip fab, would come from technology partners, equipment
suppliers, customers and investors. The other have may come from debt or equity
issuance, and an initial public share offering was a possibility.

(C) Reuters Limited 2001.

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