Tue, Jan 16, 2007 - Page 12 News List

Powerchip, Renesas plan JV firm

TEAM UP Renesas will be in charge of chip design for the joint venture, called Vantel, while Powerchip will make the chips in its eight-inch wafer fab in Taiwan


Powerchip Semiconductor Corp (力晶半導體), Taiwan's biggest computer memory chipmaker, yesterday said it planned to form a joint venture in Japan with chipmaker Renesas Technology Corp to design memory chips used in consumer electronic devices such as flat-screen televisions.

This would deepen Power-chip's cooperation with Renesas in addition to making flash memory chips, mainly used in consumer electronics, for Japan's No.2 chipmaker.

"Initially, Renesas will be mostly in charge of chip design while Powerchip will make the chips in Taiwan," Powerchip spokesman Eric Tan (譚仲民) said in a telephone interview with the Taipei Times.

Powerchip will own 65 percent of the venture, while Renesas will hold the remaining 35 percent, the Tokyo-based company said in a statement yesterday.

The companies did not provide financial details for the venture, named Vantel, which will be set up next month.

Renesas said Vantel will focus on developing memory that combines chips with different functions in a single package to reduce size. Semiconductors designed by the venture will be produced at Powerchip's eight-inch (200mm) wafer fabs in Taiwan, said Chin Chi-wei (金奇偉), Powerchip's investor relations manager.

Semiconductor makers such as Powerchip are forming alliances to share production and development costs as electronic devices including mobile phones, music players and digital televisions demand smaller, more-powerful chips.

Powerchip last month agreed to build a US$14 billion factory with Elpida Memory Inc, Japan's biggest maker of memory for computers and consumer electronics.

The latest venture will help Hsinchu-based Powerchip expand from dynamic random access memory, or DRAM, which contributes the bulk of its revenue, Chin said.

DRAM, the main memory in personal computers, accounted for 85 percent of Powerchip's operating profit last year, according to an estimate by Merrill Lynch & Co.

The Vantel announcement comes three weeks after Renesas revealed it would take a 37 percent stake in Retronix Technologies Inc, a Powerchip subsidiary, according to a release dated Dec. 25.

Renesas will jointly manage Retronix, a maker of non-memory chips used in consumer electronics that has a total investment of NT$350 million (US$11 million), it said.

Last month, Powerchip received government approval to invest US$401 million in a chip factory in China. The factory, Powerchip's first in China, will help the company move closer to manufacturers of electronic products.

Powerchip shares were unchanged at NT$20.9 at the close of trading in Taipei. The benchmark TAIEX rose 0.3 percent.

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