Japan's Sony and Germany's Qimonda said Tuesday they have agreed to form a joint venture to design high-performance memory chips for consumer and graphic applications.
The 50-50 joint venture, to be called Qreatic Design, will be based in Tokyo and is expected to start operations by the end of this year, the companies said in a joint statement.
The joint venture is expected to start with up to 30 "specialists" from Sony and Qimonda, the companies said.
Financial terms of the joint venture agreement, subject to regulatory approvals and other closing conditions, were not disclosed.
Their partnership highlights the growing competitiveness in making dynamic random access memory chips, used in personal computers, mobile phones and digital cameras.
The capital-intensive sector has forced many of the global chip makers to seek joint ventures or form strategic alliances to share technology, design and production costs.
In 2004 Qimonda rival Hynix Semiconductor of South Korea formed a joint venture with STMicroelectronics of Geneva.
Sony has been reviewing strategies for its chip operations amid hefty investments needed to keep developing new chips on its own. It's looking to focus more on chips where it can maintain higher profit margins.
Samsung Electronics of South Korea was the largest producer of non-computer DRAMs in 2006, followed by Elpida Memory, Qimonda, Micron Technology and Hynix Semiconductor, according to market researcher Gartner Dataquest.