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Samsung to put US$1bn in Philippine chip plant

South Korea’s Samsung Electronics is to invest US$1 billion in a “state of the art” microchip manufacturing facility in the Philippines, it was reported yesterday.

The Manila Bulletin newspaper said the facility would be built on a 30 hectare site in the Clark Special Economic Zone near the former US airforce base north of Manila.

Quoting unnamed sources, the paper said “it will be a state-of-the-art” facility with construction starting “within the year.”

At present, Samsung has two operations in the country, Samsung Electronics Philippines Manufacturing Corp and Samsung Electronics Philippines Corp.

The entry of Samsung in Clark will boost the zone as a hub for electronics chipmaking, an unnamed official said.

“This means the country can move upstream to design and manufacturing, as opposed to the low value-added testing and packaging operations,” the official said.

“People at Clark have been in touch with Samsung. They have been talking, exploring possibilities. There is encouraging progress,” Trade and Industry Secretary Peter Favila told Dow Jones Newswires in a phone interview.

Favila said he was still awaiting a full report on the matter, declining to give details of the planned investment.

“Samsung Electronics is exploring various investment opportunities in Southeast Asian countries, but no decision has been made,” company spokeswoman Lee Eun-hee said.

This possible development comes a year after US-based semiconductor firm Texas Instruments Inc formalized plans to invest around US$1 billion over 10 years in a new test and assembly facility in the Philippines.

In related news, Hynix Semiconductor Inc, the world’s No. 2 memory chipmaker, said yesterday it would buy a 2 percent stake in Taiwan-based chip design house Phison Electronics Corp (群聯電子).

Hynix said in a filing with the Korea Exchange that it would spend NT$346.5 million (US$11.4 million) for the stake under an alliance deal aimed at technology cooperation and joint product development.

Under the agreement, the South Korean chipmaker will also supply Phison with NAND flash memory chips until the end of next year and receive an initial payment of US$26.4 million.
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