Building of First Microchip Joint Venture in NE China Gets Underway

Construction on the site of the new Shenyang Keysi-STL Semiconductor Manufacturing Co., Ltd., the first microchip plant in northeast China, commenced in this capital city of Liaoning Province Sunday.

The company, a joint venture between Keysi International Inc. of the United States and Silicon Technology Ltd. of the Republic of Korea, will focus on micro-electronic development and the design, production and testing of integrated circuit chips.

The design of the workshop has been completed. The two partners will invest a total of 77.5 million US dollars in the first phase,which is to be completed within a year.

The operation of the company will make China the world's third producer of six-inch cellphone FBAR chip and two-inch white and blue light-emitting diode.

According to company sources, the output value of the company is predicted to reach 260 million US dollars by 2004 on an estimated 25 percent to 30 percent rate of profit, and to hit 500 million dollars by 2005 on an estimated profit rate above 30 percent.

The company will then build another factory with a Chinese partner to produce 8-inch chips for LCD Module, which are widely used in computers and cellphones, the sources said without disclosing when the planned project will begin.

The second factory is expected to yield an output value of 300 million US dollars in the first year of operations and 500 milliondollars in the following year, with the profit rate ranging from 35 percent to 40 percent.