Elpida Memory and Winbond Electronics Corp. have announced that they have signed a memorandum of understanding (MOU) for DRAM foundry services that will see Winbond manufacture DRAMs under contract to Elpida. The outsourcing agreement is the first step of a business partnership the two companies intend to pursue further.

Winbond is about to start selling GDDR3 and GDDR5 memory chips to Elpida in accordance with the agreement signed earlier this year. However, Elpida wants to substantially boost its commodity DRAM market share and is looking for partners who would adopt its process technologies and would allocate part of their output to the Japanese vendor. Last week Elpida signed technology-for-capacity agreement with ProMOS.

"The combination of Elpida's advanced technology and Winbond's rich product manufacturing experience, which includes graphics memory, will enable us to expand our product lineup across a wide range of applications," said Yukio Sakamoto, president and chief executive officer of Elpida.

Under the agreement, Elpida and Winbond will now embark on a more formal business relationship. As a first step Elpida will provide Winbond with advanced DRAM process technology and product technology and in return Winbond will allocate certain capacity at its wafer fabs in Taichung to manufacture these DRAM products. Elpida will purchase the product output and sell it to major customers under its own corporate brand name.

"Winbond is pleased to form a business partnership with Elpida, world-leading DRAM supplier, starting with a graphic DRAM foundry by using current technology. However, to make this partnership a long and lasting relationship, I believe implementing next generation DRAM process technology from Elpida into our fab will be the best solution for both of us. It will enhance the competitiveness of our specialty DRAM, Mobile RAM as well." said Arthur Chiao, chief executive and chairman of Winbond Electronics Corporation.

Tags: Elpida, Winbond, DRAM, Business