Infineon, Taiwan's Nanya to collaborate on DRAM

Germany's Infineon Technologies AG and Taiwan's Nanya Technology have signed a memorandum of understanding (MoU) that could lead to the joint construction of an advanced memory-chip factory in Taiwan.

Under the terms of the agreement, announced Thursday, the two companies will also codevelop 90-nanometer and 70-nanometer production technology for 300-millimeter diameter wafers from October this year, they said in a statement.

Current memory production technology is centered around a 130-nanometer, or 0.13-micron, production process. The measurement represents the smallest gap that exists between objects on the semiconductor surface and, as it becomes smaller, circuits and components can be squeezed closer together and higher-capacity memory chips can be produced.

The two companies have also agreed to establish a jointly owned DRAM (dynamic RAM) production venture and build a factory in Taoyuan, Taiwan. The facility will process 300-millimeter wafers, they said. The industry is shifting to 300-millimeter wafer production as it can be used to produce more chips at lower cost than the previous standard, 200-millimeter wafers. First test wafers could be produced in late 2003 with first stage production of around 20,000 wafers per month reached in the second half of 2004, the companies said.

The MoU marks the latest round in broad consolidation in the memory industry, which has seen many players selling or merging their DRAM operations in an effort to insulate themselves from research and development costs, which are rising as production processes become more advanced, and the effects of the highly cyclical computer-memory market, in which prices dropped to a point last year where DRAM makers were selling chips below cost for several months.

In signing a deal with Nanya, Infineon is treading a well-worn path. With their smaller budgets, Taiwanese semiconductor makers often sign such agreements to get access to advanced production technology. Infineon has previously signed such a deal with Mosel Vitelic Inc. forming a joint venture, ProMOS Technologies Inc., of which Infineon takes 48 percent of the output. Infineon will also license its 0.11-micron production technology to Winbond Electronics Corp., it said last month.

Taiwanese chip makers have been signing deals with other foreign manufacturers too. Advanced Micro Devices Inc. (AMD) and United Microelectronics Corp. (UMC), announced a plan earlier this year to build a 300-millimeter wafer plant in Singapore and to collaborate on production technologies down to 65 nanometers. In April, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Koninklijke Philips Electronics NV and STMicroelectronics NV (ST) said they will develop a 90-nanometer production process together.

The Infineon-Nanya MoU is dependent on a full deal being signed by the companies and also requires clearance from antitrust authorities, the companies noted.

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