Elpida Memory and Powerchip Semiconductor Corp. (PSC) have jointly announced that both parties will establish a new joint venture company to operate dynamic random access memory (DRAM) fabrication facilities in Central Taiwan Science Park. The new fabs are expected to increase production capacities of both companies dramatically.

“Now is the time for us to make our move into PC DRAM production to be the number one player in the DRAM industry. We have decided to do so because we have gained credibility for our advanced DDR2 SDRAM backed up by the high productivity at our E300 fab in Hiroshima,” said Yukio Sakamoto, chief executive and president of Elpida.

The total planned capacity of the new site is 240 thousand 300mm wafers per month, making this site the largest concentration of 300” DRAM fabrication facilities in the world, according to the companies. At the same time, both parties have also agreed to jointly develop a part of next generation process technology.

Both parties initially will jointly invest NT$40 billion ($1.229 billion, Ђ929.5 million) to establish the new venture, where the new venture will then obtain PSC’s current 300mm fabrication facility in Taichung Houli Science Park, which is currently under construction. In addition to PSC investing capital, PSC will also allocate human resources for a part of Elpida’s next generation DRAM process technology development, thus allowing both parties to enjoy the benefits of joint development.

“We are very confident in our 70nm process technology, soon to be in mass production in our E300 fab. We are very happy to be able to transfer this new technology to ramp up our new joint fab,” Mr. Sakamoto added.

Elpida and PSC’s Taiwan joint venture in Central Taiwan Science Park will act as DRAM manufacturing base of operations, which will eventually become four 300mm DRAM fabrication facilities with a combined capacity of 240 000 wafers per month.

Currently the first fab under construction will have a capacity of 60 thousand 300mm wafers per month where the clean room is now being installed. In Q2 of 2007, equipment will be installed and in Q3 mass production will begin on Elpida’s 70nm process technology where the first stage capacity will reach 30 thousand 300mm wafers per month. This capacity will be split equally between the two largest shareholders.

Yukio Sakamoto also expressed that a combination of Elpida’s advanced process technology and PSC’s cost competitiveness in the DRAM production will bring this joint venture “outstanding” production capabilities to supply high quality DRAM products at competitive prices.