Chartered to absorb Hitachi fab

Chartered Semiconductor Manufacturing will take over Hitachi's eight-inch wafer fabrication plant in a US$233 million deal.

Chartered said it entered an agreement with Hitachi and Hitachi Asia to purchase over 100% of Hitachi Semiconductor Singapore, including an eight-inch wafer fabrication facility located here.

The 28,000 sqm building is currently capable of producing approximately 24,000 eight-inch wafers per month at the 0.15-micron to 0.25-micron technology nodes at its 12,000 sqm of clean room space.

In addition to the fab, the US$233-million deal includes a manufacturing agreement with Renesas Technology, an existing customer of Hitachi Semiconductor, to provide approximately US$250 million to US$300 million worth of future wafer fabrication services.

"This announcement reflects the progress we have made so far with our value-added technology offerings and allows us to capitalise the investments we have already made in that area by adding immediately available capacity near our existing campus with a trained employee base of approximately 800 people," said Chia Song Hwee, president and CEO of Chartered.

The new fab will join Chartered's four other existing eight-inch fabs it operates. The transaction is expected to be neutral to Chartered's earnings in 2008.