It was officially revealed for the first time today that the cost of the Sarawak government-owned 1st Silicon (M) Sdn Bhd's wafer foundry in Kuching is RM6.46 billion, almost doubled previous estimations.

Earlier reports, quoting authoritative sources, suggested that Malaysia's pioneer wafer foundry (the second is in Kulim, Kedah) was around RM3.8 billion.

Sarawak deputy chief minister Dr George Chan Hong Nam, who also holds the finance and public utilities and industrial development portfolios, told a press conference this afternoon that "the total project cost of the wafer fabrication plant project at Samajaya Free Industrial Zone is US$1.7 billion [RM6.46 billion] to attain an output of 30,000 wafers per month.

"Until the month of April 2002 1st Silicon's installed capacity was 8,500 wafers per month, and the total capital expenditure incurred up to early this year is under US$1 billion [RM3.8 billion] for buildings, clean room, support facilities, equipment, etc."

Chan called the press conference at his office on the 20th floor of the state ministerial complex Bangunan Bapa Malaysia in Petra Jaya on the north bank of Kuching to clarify a statement made by sole opposition DAP assemblyman for Kidurong, Chiew Chiu Sing, during question time in the state assembly this morning.

Chiew in a written question had asked about the effects of the economic downturn in the electrical and electronic sector in Sarawak, and the steps being taken to overcome these problems.

But when he asked, referring to a recent financial news agency Bloomberg 's report which quoted 1st Silicon chief executive officer saying that the company was raising overseas bonds amounting to US$300 million (RM1.14 billion) this year for expansion, Chan refused to answer.

The deputy chief minister said that the issue was not directly related to the original question, and subsequently House speaker Asfia Awang Nassar disallowed Chiew's supplementary question.

"Can't let 1st Silicon fail"

During coffee break when he was approached by reporters and asked to comment on Chiew's comments on the new US$300 million bonds for 1st Silicon, the deputy chief minister reacted emotionally: "No matter what, I can't let 1st Silicon to fail. I will issue a press statement in a few days time."

After lunch, however, reporters were told that Chan would be calling a press conference on the matter at 4pm in his office.

At the press conference, the deputy chief minister said that although Chiew's supplementary question was not answered in the House as it was not related to the original question, "in order to avoid any possible insinuation that there may be something to hide, I wish to make a statement to clarify the matter."

Chan added that the insinuation by the opposition member that the money was for replacing old equipment was baseless.

"The US$300 million referred to in the Bloomberg news is actually in the form of equity, not loan, and this will be provided for from various sources which, at this point of time, is premature to identify in view of ongoing negotiations and activities connected with the imminent injection of this equity amount.

"All equities and loans, which have been raised, will be drawn down at appropriate times, and used to purchase equipment to expand its production capacity.

"There is no need to replace any equipment that has been purchased. All equipment purchased are now being usefully deployed for production. This can be seen from the capacity utilisation of 71.3 per cent in April 2002, or in the development work for migration to 0.18 technology, and to qualify products for new customers."