Seeking to meet exploding demand in a hot market, Singapore's STATS ChipPAC Ltd plans to build its second chip assembly and test facility in Shanghai, China.

A new 300,000-square-foot facility will be built next to STATS ChipPAC's existing 430,000-square-foot facility in the Qingpu District of Shanghai. The building construction is scheduled to begin in the third quarter of this year and will be equipped according to customer demand.

Target completion of the factory is slated for mid-2006. The new facility will almost double the current manufacturing floor space in China, said Wan Choong Hoe, STATS ChipPAC's chief operating officer.

"We view China as a strategic location to provide customers with high volume laminate products from design to distribution, evolutionary stacked die solutions, and advanced SiP technology," he said in a statement. Beginning in the first quarter of 2005, STATS ChipPAC Shanghai has ramped a variety of high volume laminate products to support multiple customers in markets such as chipsets, PC computing, consumer, and broadband applications.