14 DAY TRIAL // Elpida and PowerChip have just announced that the two companies have reached a non-binding understanding, enabling the former to purchase all PC DRAM products manufactured by Powerchip and sell them under its own brand.
The agreement covers both existing and future memory chips produced by Powerchip, and is probably motivated by the ever dropping prices of computer memory chips.
Currently, Elpida has a foundry agreement with Powerchip for PC DRAMs as the company purchases half of what Powerchip manufactures at their fabs in Hsinchu, Taiwan.
This means that only half of the 80,000 wafers per month that Powerchip produces are released under their own brand name, the Taiwanese company also purchasing approximately 30,000 DRAM wafers from the Rexchip Electronics Corporation, to sell them under their own name.
“Both companies are pleased with this win-win situation which will improve each company's business.
“This will also allow both companies to focus on their core competencies; Elpida's sales and marketing and technology development strengths and Powerchip's manufacturing efficiency and process technology strengths.
“Both Elpida and Powerchip will further cooperate together to improve customer satisfaction,” reads the press released issued by the companies.
This agreement will enable Elpida to expand its production capacity without capital expenditures as Powerchip's fabs already use their technology for manufacturing memory chips.
In addition, the agreement allows Elpida to allocate its Hiroshima Fab production capacity to the manufacturing of mobile DRAM parts, as demand for such chips has been increasing rapidly.
Elpida can compensate a declining portion of PC DRAM production at Hiroshima by using its foundry partner to maintain and improve its presence in the DRAM industry.
Powerchip plans to shift towards a foundry model by expanding its foundry production portion to Elpida as well as other semiconductor products and customers (without neglecting its current partners).