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Wed, Dec 10, 2003 - Page 12 News List

Grace now supplies Oki with pre-printed chips

BLOOMBERG

Oki Electric Industry Co, the world's biggest maker of low-capacity memory chips, said it asked Grace Semiconductor Manufacturing Corp to supply wafers printed with circuitry for wireless communications for the first time.

The first shipment was delivered yesterday, said Kunihide Otomo, a spokesman for Tokyo, Japan-based Oki. He didn't provide details, nor did he confirm a Financial Times report that it would be as much as what could be produced from 1,500 8-inch silicon wafers each month.

The chips produced will be used in Oki's mobile communications products sold in China, Grace Semiconductor and Oki said in a joint statement. The two companies held a briefing yesterday afternoon at the Grace plant in Shanghai. Foreign media were barred from attending.

"Oki will expand its SoC product offerings from communications to the personal and mobile markets," said Katsumasa Shinozuka, chairman of Oki in a statement. "This strategy, which will help boost Chinese market development, further underscores Oki's long-term strategy in China." How many wafers Shanghai-based Grace, a maker of made-to-order chips, will supply depends on how many Oki wants, Otomo said.

Oki will expand its order to Grace Semiconductor next year to include flash memory products to be sold to the Chinese automobile market, the statement said.

Demand for mobile phones, personal computers and other electronic products is expanding in China. The country's semiconductor market will grow 18 percent this year to US$27 billion, according to market researcher Gartner Inc, outpacing a 10 percent forecast growth in global sales.

China has about 250 million cellular subscriptions, or about one in five Chinese. The country adds as many as 5 million new subscriptions every month.

Grace's technology partners include Oki and US-based Silicon Storage Technology Inc, which makes memory chips for mobile phones. The companies have both taken stakes in Grace.

Grace Semiconductor, a chipmaker founded by a son of former Chinese President Jiang Zemin (江澤民), plans to raise as much as US$3 billion selling shares to the public by the first half of 2005 to expand production.

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