News

posted on 11 August 2008 07:33

After stepping back from promised integration in June  the two DRAM manufacturers Elpida and Qimonda seem to be getting closer together again.

One point of interest is in seeing if one or both will bite the significant cost-saving bullet and start joint-manufacturing. Elpida has just entered a joint-venture with the Suzhou Venture Group (SVG) of China, a venture capital operation. The JV will produce DRAM in a new plant in Suzhou, China, using 300mm wafers and a 50nm Elpida-Qimonda process. It will start operations in 2010 and migrate to a 40nm process as soon as is feasible.

The Elpida-SVG JV is expected to result in highly competitive and leading-edge semiconductor products that will be made available to mainly China's domestic market.  All the output will be purchased by Elpida. 

Gartner expects PC shipments in China to become 18 percent of the worldwide shipments. This growth will rapidly generate large DRAM demand in the Chinese market which the new joint venture can help satisfy.

SVG will build the plant which, with the equipment inside, will cost around $5 billion. The JV is funded 39 percent by Elpida and 61 percent by Suzhou and potential third-party investor(s). It is speculated that Qimonda is  one of the outside investors, possibly the only one. Reports say Qimonda has admitted having talks with Elpida on the subject.

Qimonda has a fairly drastic need to save money and cut costs.

Yukio Sakamoto, Elpida CEO and President, said: "This joint venture opens an opportunity for Elpida to strengthen its production and marketing profile in China and the entire Asian market. In addition, we can accomplish cost efficient investments based on shared capital expenditures and shared business risks."

The JV's establishment is subject to final agreement by the investors.

A little more here.

Note

Elpida has announced Q1 fy08 results with net sales of 109.2 nillion yen, virtually flat being 0.2 percent down on the year-ago quarter. Net income for the quarter was a loss of 13.8 billion yen, down 0.8 billion yen on the year-ago quarter.

^{[Martin Edwards, news writer.]}