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Elpida Memory, who badly needs funding in order to upgrade its facilities, and Intel Corporation today announced they have signed an agreement for Intel to invest approximately $100 million in Elpida Memory in return for non-voting stock.

Elpida Memory plans to use the proceeds from this proposed investment and other intended financing to significantly boost production at its 300mm, sub-0.11 micron DRAM wafer fabrication plant in Hiroshima, Japan. Assuming timely satisfaction of all closing conditions, including satisfactory completion of due diligence, receipt of necessary internal and regulatory approvals and achievement of a substantial additional funding amount from other investors, the parties anticipate closing the Intel investment in coordination with the closing of the additional financing that Elpida intends to raise later this year.

In addition to the proposed investment, Elpida and Intel have signed a multi-year commercial agreement. As part of the agreement, the companies will share roadmaps in order to develop new DRAM architectures. This will allow the Santa Clara, California-based chip company to control Elpida’s product roadmap and it may help Intel in bringing more advanced platforms on time to the market ensuring that the memory types Intel proposes are supported by certain DRAM companies.

In addition to Intel, Hitachi and NEC will also invest 80 million in their joint venture.

Rumours about possible Intel investing in the Japanese DRAM company have been around for half a year or more already, so, the news comes with no surprise.

In total Elpida needs half a billion in order to fully deploy all its expansion plans and return to profitability eventually.

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