Micron Technology Inc's new US$250 million chip plant is expected to start operation in the first quarter next year, the US-based company said yesterday in Shanghai.

The new plant will help Micron compete against rivals STMicroelectronics and Hynix Semiconductor, which opened a joint-invested plant in China last month.

The building housing Micron's new chip assembly and test plant in Xi'an in Shaanxi Province will be completed by the end of this year, according to the world's No. 2 memory chip provider. Production details were not provided.

"We are fully committed to the Chinese market as surging demand (for memory chips) is boosted by mobile phones and computers," said Terry Mo, managing director of Micron China.

Thirty-five percent of Micron's US$5.26 billion revenue for the fiscal year that ended in September came from the Asia-Pacific region, boosted mainly by the Chinese market.

Europe-based STMicroelectronics and Hynix Semiconductor's US$2 billion 12-inch memory chip plant opened in Wuxi, Jiangsu Province in October. The new plant will manufacture memory chips with a monthly capacity of 50,000 units.

US firms, like Micron, are not allowed to establish front-end manufacturing plants called "fabs" on the Chinese mainland, like the Wuxi plant, industry insiders said.

"To compete with our rivals, we will provide a wide portfolio of products in China, such as image sensors used in digital cameras," Mo said.

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