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Infineon climbs into bed with Nanya

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Infineon has signed a memory manufacturing and technology sharing deal with Nanya.

The duo are to build new plant in Taiwan, committing €550m each to the project, until 2005. The deal will see 1,300 new jobs created and a total investment commitment of €2.2bn.

The first chips will roll off the production line in late 2003 and capacity will ramp up to a maximum of 50,000 wafer starts a month. They are also building a new 300m facility which is expected to open for business with an initial capacity of 20,000 wafer starts a month in the second half of 2004

Nanya, the Taiwanese player, estimates the additional production capacity will take it into fourth place worldwide in the DRAM maker league table, with double digit market share. According to Infineon, joint share will be above 20 per cent worldwide, when production is fully ramped up (sometime in 2004/2005).

Infineon and Nanya will also pool together development efforts for the introduction of 0.09micron and 0.07micron assembly lines.

Co-operation is the name of the game in the DRAM market, with soaring costs for the introduction of new technology and tumbling prices. But getting rival to work together is not necessarily easy: last month, Infineon walked away from its original Taiwanese manufacturing partner, Mosel Vitelic, citing persistent breaches of their agreement. At the same time it walked away from ProMOS, a DRAM manufacturing facility jointly-owned (mostly) with Mosel Vitelic. Infineon said it was prepared to continue placing business ProMos's way (it accounted for 40 per cent+ of production) subject to new negotiations.

Today's announcement suggests that ProMOS will have to look even harder for new customers. ®

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Infineon beats up Mosel-Vitelic

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