MANHASSET, N.Y. The chairman of Shanghai-based chip maker Semiconductor Manufacturing International Corp (SMIC) said Tuesday it is looking elsewhere to borrow money to buy manufacturing equipment while the U.S. government holds off approving a $769 million loan, according to an Associated Press report.
The U.S. Export-Import Bank, a government agency that promotes U.S. exports, hasn't agreed to serve as guarantor to the loan to SMIC, the report said.
The apparent delay reportedly came as U.S.-based Micron Technology Inc., the world's second largest supplier of computer memory chips, protested the loan as a boon to China's chip industry at the cost of U.S. jobs.
An SMIC official reportedly said earlier the company still held out hope that the loan would be approved, but SMIC Chairman Richard Chang said Tuesday the U.S. loan has been put on hold.
Cheng said the company is pursuing loans in Europe, Japan, China and Hong Kong which it hopes to secure in the second quarter of the year, according to AP.
The U.S. loan would have been reportedly used to buy equipment from U.S. companies like Applied Materials Inc., Novellus Systems Inc. and KLA-Tencor Corp.
As reported, the Export-Import Bank in January rejected a request from SMIC for a $769 million loan guarantee that would have been used to buy chip-making equipment from mainly Applied Materials Inc., according to a report.
Applied had argued that the loan would be in keeping with the bank's mission of supporting U.S. exports, and would keep Shanghai-based SMIC, from using chip-making equipment suppliers in Japan, South Korea or Europe, the report said. Applied expressed its "disappointment" after being rejected for a loan guarantee that would help provide fab equipment for Chinese foundry startup SMIC (see Feb. 15 story).
The uncertainty over the loan status further clouded SMIC's financial picture. On Monday, SMIC announced it had posted a net loss of $11.2 million on sales of $291.8 million in the fourth quarter of 2004.