NEC Corp and Hitachi Ltd’s broad alliance over DRAM memory chips, announced earlier this week (CI No 3,689) is an attempt by the two to capture up to 20% of the global DRAM market, a comparable or greater share than the Korean giants Samsung Electric Co and the soon to be combined LG Semicon Co […]
NEC Corp and Hitachi Ltd’s broad alliance over DRAM memory chips, announced earlier this week (CI No 3,689) is an attempt by the two to capture up to 20% of the global DRAM market, a comparable or greater share than the Korean giants Samsung Electric Co and the soon to be combined LG Semicon Co and Hyunda Electronics Industries Co. The agreement, which is still being finalized, includes the possibilities of setting up of a joint venture company responsible for DRAM development, and the design and unification of current DRAM products under a single brand, manufactured using the production resources at both companies.
Joint venture development could be in place by the end of the year, and a unification of product brands and other items will follow once a basic, concrete agreement is reached, the two companies said. The move has been spurred on by an increasing number of alliances and mergers – including the merger of LG and Hyundai – and by the need for economies of scale and expense controls brought on by the slump in memory chip prices.
NEC has been working on high density, high speed memory technologies such as its Virtual Channel Memory architecture, which it is proposing as a standard for graphics intensive applications. Hitachi has been early with .18 micron process manufacturing, and has developed proprietary packaging technology.
But NEC declared earlier this month that it would not be making any further large-scale investments in new DRAM facilities (CI No 3,676) due to continued depression in the market. Instead, it planned to increase the proportion of its output made by Taiwanese foundry manufacturers and upgrade its existing production plants. In May (CI No 3,665) Hitachi said it would be spending $200m on converting three of its existing memory chip plants into fabs that make microchips for consumer electronics devices.
Separately, Mitsubishi Electric Corp signed a deal with Taiwan’s Vanguard International Semiconductor Corp, under which Vanguard will produce DRAMs for Mitsubishi. Vanguard will supply Mitsubishi with several million units of 64-megabit DRAMs per month, in return for Mitsubishi’s DRAM technology. Mitsubishi said earlier this year that it was looking to exit domestic DRAM production (CI No 3,630).