LONDON The Welsh Development Agency and Hynix Semiconductor Wales (a subsidiary of the Korea-based Hynix Semiconductor) which developed the LG semiconductor plant at Newport, have signed a settlement agreement for the recovery of assistance provided by the Agency for the construction of the plant.
The WDA will recover all of the £36.65million that it contributed to assist the project. Hynix (formerly known as LG Semicon Wales Ltd) had invested a total of £131 million in the construction of the 100,000 sq.m. plant at Newport.
Hynix has already transferred from its ownership to the WDA some 55 acres of serviced land adjacent to the semiconductor plant. The land was valued at £6.65million and will be sold by the Agency for development.
The company has transferred the remaining plant and buildings valued at £17million and has also made a payment of £13million to the WDA.
A Hynix spokesperson said, “Hynix is extremely disappointed that the changes in the global semiconductor market have meant that it has been unable to progress this major project in Newport and that it has had to write off the major part of its investment. However, the repayment of the grant and the return of the site to the public sector has enabled Hynix to withdraw honourably and at no cost the public purse.”
Nic Neal, the WDA’s executive director, land development and legal services, said, “Like us, Hynix wishes to see the site brought into use for the benefit of the local economy – and we shall be redoubling our effort to find a new owner who can use this facility to create skilled and sustainable jobs for the Newport area.”
The semiconductor fab never started production and was part of a development by LG that was predicted to create 6000 jobs but never got much above 2000. LG sold the empty fab to Hynix, formerly Hyundai, in a £1.3 billion merger deal following a slump in the microchip industry and a slide in the Far East economy.
The WDA is conducting a world-wide marketing campaign to find a suitable purchaser for the plant.