Japan's Elpida to form chip JV in China

Japan's Elpida Memory Inc, the third largest maker of PC memory in the world, plans to set up a joint venture with Suzhou Venture Group Co Ltd (SVG) to produce DRAM in Suzhou to meet growing DRAM demand in the Chinese market, industry sources reported.

The new venture, with the total cost of about US$5 billion and covering an area of 320,000 square meters, will be set up in the Suzhou Industrial Park by the end of 2008.

It will build a 300-mm wafer fabrication facility, which is designed to have an initial production capacity of 40,000 wafers a month when it becomes operational in the first quarter of 2010. The capacity is expected to be doubled at a later time.

Elpida's 50-nm DRAM process technology will be used at the beginning and migration to 40-nm will take place as soon as the process is ready. Elpida will purchase all the products of the fab.

The Tokyo-based company will take 39% shares in the new joint venture, while the remaining 61% will be held by Suzhou Venture Group and the third-party investors, the companies said in a joint release.

It was reported that the joint venture would be Elpida's first production base in Chinese mainland.

Elpida also makes DRAM in Taiwan with partner Powerchip, and cooperates with Taiwan's UMC to make chips for Japanese firms.