BEIJING, April 29 -- Hynix Semiconductor of South Korea and STMicroelectronics (STMicro) would kick off production at a US$2 billion chipmaking plant in eastern China before the end of the year, both companies said Thursday.

    The facility in Wuxi, a city two hours by car from Shanghai, would begin by making 8-inch wafers of memory chips and move on to 12-inch wafers by late 2006, they said in a statement. The bigger wafers are more advanced and yield more chips.

    Investment from STMicro and Hynix is expected to total US$375 million this year, one-third of which would come from STMicro.

    ¡°At the new fab site, an 8-inch wafer line is scheduled to begin production by the end of this year,¡± the companies said in a statement. ¡°Shortly thereafter, a 12-inch wafer line will begin production in late 2006.¡±

    China is the world's fastest-growing semiconductor market, with forecast sales valued at US$48.3 billion this year and US$60 billion by 2007, according to IT consultancy Gartner.

    According to reports after STMicro and Hynix formed a joint venture, the new factory would have two production lines, one with an initial monthly capacity of 20,000 8-inch wafers, expanding to 60,000 in future.

    A second line for 12-inch wafers is set to have a production capacity of 17,000 wafers monthly.

    Wuxi is home also to rival Chinese microchip maker CSMC Technologies Corp., whose investors include Singapore's Chartered Semiconductor Manufacturing Ltd., the world¡¯s fourth-largest maker of made-to-order microchips.

    (Source: Shenzhen Daily/Agencies)