SK Hynix, the world’s second-largest chip supplier, signed a deal with the Chinese city of Chongqing for chip testing and packaging, the Seoul-based company said on Monday.

Under the agreement, the two sides will establish a joint corporation based on a memorandum for investment. Chongqing will be responsible for the backend processing involving mainly the testing and packaging of chips, the company said.

SK Hynix appeared to believe that the investment would be mutually beneficial, with the chipmaker taking advantage of the convenient logistics and abundant human resources offered by Chongqing.

The city, on the other hand, reportedly pledged to offer optimal business conditions based on hopes that the SK Hynix facility would give impetus for the growth of Chongqing’s IT industry.

(jemmie@heraldcorp.com)