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Fri, Nov 09, 2001 - Page 24 News List

Winbond to join forces with Sharp

BLOOMBERG , TAIPEI

Winbond Electronics Corp (華邦電子) said it will join forces with Japan's Sharp Corp to develop flash-memory chips for mobile phones capable of accessing the Internet at high speeds.

Taiwan's biggest maker of memory chips (by market value) said it yesterday signed an agreement with Osaka-based Sharp to make the chips, which retain data even when power is switched off in computers and other electronic devices.

Sharp, whose first-half profit fell 14 percent on declining prices of chips and flat-screen TVs, is cutting costs by shifting TV production to countries with cheaper labor costs and tying up with partners to share chip development expenses. Winbond does everything from development to production of chips, making the Taiwanese chipmaker an ideal partner, analysts said.

"Winbond has been looking for a flash technology partner and Sharp is a first-tier provider of flash-memory technology," said Don Floyd, a semiconductor analyst at Lehman Brothers Holdings Inc. He has a "buy" recommendation on Winbond shares.

Two types of miniature flash memories will be developed, Winbond said. While one will have a capacity of 128MB, the other will be for 256MB.

Sharp, the fourth largest maker of flash memory chips, expects the partnership to reduce development costs by "several tens of billions of yen" and ensure mass production by 2004, a report in the Nikkei English News said.

Sharp will continue to develop and sell flash memory chips in alliance with Intel Corp. No date has been set for when the production of the new flash memory chips with Winbond will start.

Winbond was the tenth-largest memory chipmaker last year, according to consultants Gartner Inc.

Separately, Sharp said it will begin producing wall-mounted LCD TVs in Spain and China next year.

Japan's largest maker of liquid-crystal displays will export flat panels and other key parts to its Spanish and Chinese plants, which currently make cathode-ray tube TVs, and assemble them into LCD TVs for the European and Asian markets, said spokesman Hiroshi Taniguchi. LCD TVs for the US will continue to be made at the company's plant in Tochigi prefecture, north of Tokyo, he said.

Sharp expects to triple sales of LCD TVs by the year ending March 31, 2005, according to Taniguchi. That would mean domestic sales of ?130 billion (US$1.1 billion) and overseas revenue of ?30 billion.

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