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Japanese chip maker Elpida Memory will outsource production of advanced PC memory chips to Taiwan's No.3 DRAM maker ProMOS as it seeks to cut costs and better compete against bigger South Korean rivals.
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Elpida, in a neck-and-neck race with U.S. chipmaker Micron Technology
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] to be the world's No.3 DRAM maker, said it will outsource production of DDR3 type DRAM memory chips to meet rising demand from PC makers who are focusing on power consumption and faster processing.
The tie-up will allow ProMOS, which is seeking to diversify into the contract chip business, to lift its plant usage rate at its 300-mm plant in Taichung, central Taiwan.
Chipmakers are hurrying to adopt new technologies and grab market share in DDR3 as the chip sector emerges from a prolonged slump.
Elpida, which secured a $2 billion lifeline earlier this year including public money, in particular is rushing to narrow the technology and market share gap between it and bigger South Korean rivals Samsung Electronics and Hynix Semiconductor.
Elpida will provide 65-nanometre process technology to ProMOS for mass production in the second half of 2010. Outsourced production is likely to be for about 30,000 to 40,000 wafers a month.
Elpida, which reported its first operating profit in eight quarters on Thursday, is cementing ties with its former Taiwan rivals, and has entered into a capital tie-up with Taiwan's state-backed Taiwan Innovation Memory (TIMC).
ProMOS has also said it would partner with TIMC, but has given no details.
Shares in Elpida, which on Thursday said it is considering investing in more lithography machines to boost output next year, were up 4.3 percent, outperforming Tokyo's electrical machinery sub-index, which rose 2.2 percent.
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