Eastern Jiangsu Province drafted an agreement to establish a foreign-owned company to produce large integrated circuits in Wuxi City, a microelectronics production base in China, Wednesday.

This is the largest foreign-owned company, in terms investment size, in Jiangsu, according to an economic and trade official from the province.

To be located in the export-oriented processing zone in Wuxi, the project will be funded by the Hynix Semiconductor Company from the Repulic of Korea (ROK) and STMicro electronics from Europe, with an estimated total investment of 2 billion US dollars and registered capital of 750 million US dollars.

The project will specialize in memory chip production, packaging and probe, with a designed monthly production capacity of 20,000 8-inch wafers and 17,000 12-inch wafers.

The official said that the project would boast a world-class manufacturing standards for 0.13-micron and even for 0.11-micron chips, whereas all of the existing domestic chip makers are only able to produce 0.18-micron chips.

As the second biggest DRAM (dynamics random access memory) maker in the world, the ROK-based Hynix company has six 8-inch wafer production lines and earned 900 million US dollars in profits in the first half of this year.

STMicroelectronics, the world's fifth largest semiconductor manufacturer, garnered a net income of 7.22 billion US dollars in 2003.

It is reported that global manufacturing of computers and cellphones is shifting to the Chinese mainland, driving up demand for chips and wafers, whose market size has already exceeded 200 billion yuan (24.1 billion US dollars).

Source: Xinhua