A group of companies led by Elpida Memory of Japan have agreed to establish joint-venture called Tera Probe, which will be the world’s largest wafer testing facility. The initial clients of the fab will be Elpida. Later other customers are expected.

Expected to begin operation in October 2005, Tera Probe will be based in Japan and have approximately 300 employees. Tera Probe will provide wafer testing services to Elpida, as well as to other semiconductor companies located in Japan.

Elpida will take a 33% stake in the new company, while Kingston Technology Japan LLC will hold 26.8%, Powertech Technology of Taiwan will have 23.2% stake and Advantest, a Japanese manufacturer of DRAM test instruments, will hold a 17% interest.

Tera Probe facility will be located in Higashi Hiroshima City, Hiroshima Prefecture, near Elpida’s main semiconductor factory, where DRAM chips are produced.

The group of companies is expected to lower their own testing costs by outsourcing inspection of wafers to Tera Probe.

The officials said they expect Tera Probe to earn 40 billion yen ($355.5 million) annually within two to three years. They also said they plan eventually to take the company, according to The Asahi Shimbun news-paper.