CHANDLER, Ariz.--Amkor Technology Inc. today announced plans to open its first chip assembly and testing plant in China as competition for IC-manufacturing services heats up in the communist country. Amkor said its new facility in Shanghai will initially assemble and test finished ICs for baseband processors and controllers in the third quarter of 2001.
Amkor's announcement came as rival ChipPac Inc. lined up a $25 million investment from Qualcomm Inc. for expansion of its chip-packaging and -testing services in Shanghai.
Amkor is now responding in China, which has become a hotbed of activity among chip competitors. After completing a major joint-venture agreement in Japan with Toshiba Corp. last month (see Dec. 12 story), Amkor said it was now ready to take on China.
"We are opening this [Shanghai] facility on a fast-track basis to meet a customer's almost immediate requirement for our products and services," said James Kim, chairman and CEO of the word's largest merchant supplier of chip-packaging and -testing services. "And, we anticipate the need to expand the facility to meet the market needs of other customers, several of which have already inquired about assembly and test availability."
Amkor's 115,000-square-foot factory is located in the Waigaogiao Free Trade Zone of Pudong, Shanghai. The company did not release information about its investment in the plant, which will provide packaged ICs for the Chinese cellular phone, PC, and laptop computer markets.
The Shanghai plant will be equipped with tools form Amkor's facilities in South Korea and the Philippines. Engineers and technicians from Amkor's existing facilities will initially operate the Shanghai plant in the ramp up to production, and they will train locally hired employees for the plant.
"Locating in the Waigaogiao Free Trade Zone near a cluster of our top customers gives us a significant advantage in rapidly expanding our China business," said Gary Breton, senior vice president for operations in the Asian region at Amkor.
After initially starting production with base band processors and controllers, Amkor's Shanghai plant will be expanded to include components for other telecom and computer products. The company said these chip packages will house SRAM and flash memories, power controllers, radio-frequency (RF) power amplifiers, graphic chip sets and other ICs.
Separately,Qualcomm Inc. here today announced a $25 million investment in ChipPac Inc.'s semiconductor assembly and test operations in China. The investment and a new supply agreement guarantees backend chip-production capacity to Qualcomm for wireless modem ICs in China.
The investment also will play a role in ChipPac's expansion in China, where the Santa Clara, Calif.-based company is preparing to add ball-grid array (BGA) and other advanced chip-packagingtechnologies in its three-year-old Shanghai plant.
Spun out of South Korea's Hyundai Electronics Industries Co. Ltd. nearly two years ago, ChipPac is aiming to double its market share by 2005. The company already claims to be the
largest merchant supplier of IC packaging services in China.
San Diego-based Qualcomm said its agreements with ChipPac will increase its ability to sell Code Division Multiple Access (CDMA) modem integrated circuits in China.
ChipPac will assembly and test Qualcomm CDMA Technologies' QCT Mobile Station Modem (MSM) devices as well as provide direct sales in China.
