Motorola has transferred a semiconductor facility in North China's Tianjin to the Shanghai-based Semiconductor Manufacturing International Corporation (SMIC).
According to the agreement, Motorola will exchange SMIC shares with those of its MOS 17 fabrication (fab) facility, but it will continue to own its BAT semiconductor test and assembly facility and a research and development center close to the MOS 17 fab.
"It will eliminate the overhead and capital costs for Motorola at MOS-17, maintain our presence in Tianjin and China, and increase the country's contributions to our short and long-term sales," said Scott Anderson, president and chief executive officer of Motorola's Semiconductor Products Sector.
With the deal, SMIC, which has the most advanced foundry in China but mainly focuses on the memory market, will act as a strategic partner and support Motorola with the MOS-17 facility as well as other SMIC fabrication facilities in Shanghai and Beijing.
The two companies will also enter into a strategic intellectual property agreement in the areas of patents and advanced complementary metal oxide semiconductor (CMOS) process technology mainly used in telecommunications and consumer electronics.
Both parties declined to reveal the amount of capital involved in the deal, but Motorola will maintain some business interests in MOS 17 and consequently become a major investor in SMIC with a seat on its board.
Previous reports said Motorola might obtain U.S. $260 million of SMIC stocks, which aims to make a public offering in Hong Kong and the U.S. next year.
Motorola started to build its Tianjin semiconductor base in 2000 with an estimated investment of 12.2 billion yuan ($1.47 billion), which was finished in 2002. (China Daily)
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