MP calls for chip plant decision

Hyundai has failed in a bid to find a buyer for the plant

The Korean electronics firm Hyundai faces increasing demands to reach a decision about its mothballed semiconductor plant at Newport in south Wales.

Newport West MP Paul Flynn has written to the company expressing his disappointment at its failure to conclude negotiations with two companies interested in creating more than 1,000 jobs at the plant.

BBC Wales has learned that Hyundai has been speaking with the American chipmaker Intel and the Taiwanese company Mosel Vitelic.

Paul Flynn MP: Pressing for action

But both companies pulled out amid reports that Hyundai were asking too much money for the site.

LG Semicon worked with the Welsh Development Agency to create one of Europe's most advanced chip plants - with £30m of taxpayers money - and the site was due to open in 1998.

But the downturn in the Asian economy meant the plant's future was put on hold.

LG then handed over the factory its Korean rivals Hyundai who have spent the past two years trying to sell it.

Mr Flynn said that it was high time the project delivered the jobs it had once promised.

Plant refused

The MP said the blow to the nearby Llanwern plant - where nearly 2,000 jobs are due to go - meant that a decision had to be speeded up.

Hyundai has indicated it may open the plant itself - but not before 2004.

In November last year, Hyundai confirmed that Intel turned down the Newport plant because it did not need additional factories.

Some analysts have cast doubt over whether the mothballed plant will ever employ the 1,200 workers that LG Semicon had promised.

If a deal was struck for the plant soon, it would be unlikely that production could start until 2002, by which time the current microchip boom may have levelled out.