LONDON Grace Semiconductor Manufacturing Corp and Shanghai Hua Hong NEC Electronics Co. Ltd. (HHNEC) have begun construction of a 300-mm wafer fab at Zhangjiang Hi-Tech Park, Shanghai, according to local reports.
The two companies, both of which have a large degree of local government control, have been tipped to merge. Grace is controlled by the Assets Supervision and Administration Commission of Shanghai while HHNEC is a joint venture between state-run Shanghai Hua Hong and Japan's NEC Electronics.
The two companies are due to spend about 14 billion yuan (about $2 billion), of which the Shanghai municipal government will contribute about 4.5 billion yuan (about $650million), the reports said.
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iSuppli: Grace, Hua Hong NEC to merge