Elpida signs on another Taiwan DRAM maker

Elpida signed another Taiwanese DRAM maker, Winbond Electronics, to a manufacturing and technology partnership on Wednesday, putting an end to rumors that the company might join a rival alliance that uses technology from U.S.-based Micron Technology.

Winbond will begin producing GDDR3 (graphics double data rate, third generation) and GDDR5 for Elpida by the end of this year, the companies said in a joint statement. Elpida will provide Winbond with advanced DRAM manufacturing and product technology as part of the deal.

"The outsourcing agreement is the first step of a business partnership the companies intend to pursue further," the statement says.

Elpida has moved fast to shore up support for its technology in Taiwan, where over-building among DRAM makers led to a glut in DRAM chips and inability to repay loans early this year. The Taiwan government stepped in to help companies delay loan repayments and worked to encourage consolidation among DRAM makers on the island. Consolidation efforts have caused companies on the island to rally around two main foreign technology providers, Elpida and Micron.

The agreement with Winbond puts four Taiwanese DRAM manufacturers in Elpida's camp, versus two for Micron. Winbond joins ProMOS Technologies, which inked an outsourcing deal with Elpida last week, and Powerchip Semiconductor, a long time Elpida partner. Elpida and Powerchip also operate a joint venture DRAM manufacturer in Taiwan, Rexchip Electronics. Micron has signed up Nanya Technology, and together they operate joint venture Inotera Memories.

Winbond began seeking a new technology partner early this year when Germany's Qimonda, which previously worked with Winbond, filed for bankruptcy.

The IDG News Service is a Network World affiliate.