The plant, built with a combined investment of US$2 billion, is the third-biggest facility of its kind on the Chinese mainland.

The new plant will manufacture both Flash and DRAM memories, which are widely used in computers, mobile phones and music players such as the iPod NANO, the partners said in a joint statement.

The companies laid the first stone at the 550,000 square meters Wuxi site in April 2005. An 8-inch wafer plant started volume production in July with a monthly capacity of 50,000 units. The 12-inch plant is scheduled to start mass production this month with a capacity of 18,000 wafers every month.

The JV, two-thirds controlled by STMicroelectronics, employs about 2,000 workers.

"A JV of this magnitude is likely to be the largest (in semiconductor industry) between a Korean and European company," Carlo Bozotti, president and chief executive, said in the statement. "It will bring both partners significant benefits of scale."

The joint facility ranks No. 3 on the Chinese mainland in memory chip shipments behind Shanghai-based Semiconductor Manufacturing International Corp and Suzhou-based Hejian Technology Co, according to Li Ke, an analyst at Beijing-based CCID Consulting, a research firm under the Ministry of Information Industry.

The facility produces DRAM - dynamic random access memory - chips for computers and will start to make NAND-type flash memory for consumer products by the middle of next year. The split among products and memory densities will depend on market conditions, the statement said.

"Memory is always the spotlight of the industry as all equipment needs it," Li said.

In 2005, the NAND Flash market grew faster than any segment in the history of the semiconductor market, driven by a spiraling demand for storage capacity in mobile phones, digital cameras and portable audio players.

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