French-Italian semiconductor maker STMicroelectronics said recently that it is in talks with Korean partner Hynix Semiconductors about building a joint fabrication plant in China.

Confirming a statement by STMicro's chief executive Pasquale Pistorio in Brussels earlier on Tuesday, the company said a decision on whether to build the semiconductor factory with Hynix would be made within six to eight weeks. STMicro and Hynix already have a joint venture for NAND flash memory chip production. Mr Pistorio said on Tuesday there are discussions between the firms and he expected the deal to be announced in the next six weeks or two months.

Hynix, the world's third-largest maker of memory chips, said in March it had held talks with STMicro, Europe's biggest chip maker, over building a chip plant in China for a reported cost of two trillion won (S$2.9 billion). Such a deal would give STMicro and Hynix an entry into China's US$30 billion semiconductor market. The two already have a tie-up in chip development. But the deal is subject to an approval from creditors who own 81 per cent of Hynix following several multi-billion-dollar bail-outs.

The proposed plant would make dynamic random access memory (DRAM) chips used for computer memory and flash memory chips used in digital cameras and mobile phones, Hynix has said.

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