(Yicai) Dec. 28 -- Zhongtai Cryogenic Technology, a Chinese developer, designer, and manufacturer of cryogenic equipment, will set up a joint venture in South Korea with local steel-making giant Posco Holdings to produce rare gases.

Posco Zhongtai Air Solution, which will be based in Gwangyang, in the South Jeolla province, will produce and sell high-purity rare gases for chip manufacturing, the Hangzhou-based company announced today. Posco will hold a 75 percent stake in the JV, while Zhongtai Cryogenic and its units the remaining 25 percent.

The JV’s initial paid-in capital will be KRW8.4 billion (USD6.5 million), Zhongtai Cryogenic said, noting that it will use its own money to pay its KRW2.1 billion part.

Zhongtai Cryogenic [SHE: 300435] was trading 0.1 percent down at CNY14.19 (USD2.01) as of lunch break in Shenzhen today. The stock soared 5.6 percent yesterday on rumors of the partnership between the company and Posco.

According to yesterday’s social media rumors, Posco unveiled that the JV will kick off construction of the plant next year, expected to be completed and put into operation by the end of 2025. The plant was said to have an output of 130,000 normal cubic meters of rare gases per year, enough to meet the needs of half of South Korea’s chip manufacturing industry.

Posco’s New York-listed shares [NYSE: PKX] closed 3.2 percent up at USD95.27 yesterday. The firm’s stock in South Korea [KRX: 005490] was trading up 1 percent at KRW497,000 (USD385.55) as of 1.00 p.m. local time today, after closing 4 percent up yesterday.

Editor: Futura Costaglione