Inspur Starts First High-end FBGA production line in China
On December 16, the first high-end FBGA production line in China went into production in Jina. This production line is the second acquisition of Qimonda’s asset after its acquisition of Qimonda’s R&D center in China. Up to now, Inspur has established a whole industry chain of integrated circuit memory including chip design, manufacturing and application. This will help our IT product memory become independent from foreign companies, and provide support for Inspur’s R&D capability in core equipment of cloud computing, such as the server, memory and product.
This is the second asset acquisitions of Inspur to Qimonda since 2009.This time, Inspur spent 100 million RMB to acquired the test and assembly line with a total value about 0.5 billion RMB. The line, which was located in Portugal, was one of the important memory production bases of Qimonda in Europe. It adopted the world's advanced FBGA (Fine Pitch Ball Grid Array) packaging technology, which is one of the world's leading IC packaging and testing technology.
Early in the August 2009, financial crisis, Inspur "reversed the market tendency" and acquired Qimonda R&D center in China with 30 million RMB. With this acquisition, Inspur got a complete world level R&D team, equipment and first-class product design and technical experience. These, together with Inspur's high-performance server and storage State Key Laboratory, built the world's leading IC R&D platform. The R&D center has two major projects -- R&D projects of high-performance, low-power-comsumption dynamic random access memory products and embedded memory IP core development and application. It released China's first world level 65 nm dynamic random access memory of large capacity, breaking the long monopoly of foreign manufacturers to China's dynamic random access memory chip market, and filling the blank of the domestic industry. Based on the development of memory chip design capability and the country's demand, which accounts for nearly half of the global memory market, Inspur decided to carry out the second acquisition of Qimonda, to expand its integrated circuit industry to the sector of integrated circuit manufacturing.
According to Sun Pishu, chairman of Inspur, high-end integrated circuit chip technology mostly lies in the hands of a small number of foreign companies. During the global economic downturn, realizing the control of industry resources, especially core technology through capital operation and international M&A cooperation is of great importance to break the technical barriers, which has long hindered the sustainable development of the industry. It can also help achieve leapfrog development of IC memory industry. The IC industry is the foundation of IT industry. Through this acquisition, Chinese enterprises have a memory chip packaging and testing technology synchronized with the international advanced level. This can accelerate the process of China's IC industry, and also help improve China's IT industry core competitiveness.
With the coming of the cloud computing era, it becomes more important for us to develop the integrated circuit memory industry. Memory is a core component of cloud computing equipment, and plays an important role in promoting the performance of cloud computing. Inspur always aims at the core end of the industrial chain. It relies on its State Key Laboratory of server and storage technology, and IC R&D platform, to build a world leading chip-level R&D platform. Based on this, it independently developed a series of cloud computing infrastructure equipment, including 32-way high-end fault-tolerant computers, mass storage, high-density servers, container data center, laying a solid foundation for building China's independent, controllable and secure cloud computing infrastructure platform. This acquisition is also another important step for Inspur to maintain its leadership in the cloud computing industry.
Memory is like the food for the IT industry, accounting for over a quarter of the output value of the integrated circuit industry. The annual import of integrated circuit chips is over 150 billion dollar. Chips have surpassed ores and oil to become the largest import in China. Currently, the core technologies are dominated by a small number of foreign companies, which is unfavorable for our IT industry, information security and the development of national economy. Through independent R&D and M&A, Inspur can not only meet the growing demand of domestic market, but also provide guarantee for the national information security.
Once going into full production, the production line can produce 60 million high-end memory chips every year, with annual sale of over 100 million dollar. To expand the business, in the next 5 years, Inspur will build a specialized integrated circuit industrial park in the export and processing zone in Jinan. It plans to invest 3 billion yuan to build a world level integrated circuit R&D center and manufacturing base. This will help China to control the memory industry chain and gradually build our own complete industry chain of integrated circuits. The plan has its practical significance for the development of integrated circuit industry in Shandong and even the whole country.
About Qimonda AG
Qimonda AG is a famous DRAM company, leader in 300mm industry, and one of the top suppliers of DRAM products for the PC and server markets. Although the company performed well before the fiscal year 2007, its revenue and cash flow plummeted in the fiscal year 2008 and the company was trapped in financial distress. Suffered from the downturn in the industry and the global financial crisis, the DRAM market kept sluggish in the past two years. On January 23, 2009, Qimonda AG filed for insolvency protection