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UMC shares foundry processes with Elpida in new foundry pact

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ElpidaElpida Memory will open up its 300mm fab capacity at its Hiroshima-based fab for foundry work in a deal with UMC. The second largest foundry will provide IP support as well as advanced logic processes to Elpida, specifically targeting potential Japanese companies wishing to use foundry services on 300mm wafers at a fab in Japan. 

"We believe that Elpida is an attractive outsourcing option for Japanese IC companies due to our close geographic proximity to them and the fact that Elpida does not compete in the same markets as our target foundry customers," said Yukio Sakamoto, President and CEO of Elpida. "Elpida will continue to focus on DRAM manufacturing for mobile devices and digital consumer electronics customers. Overall DRAM business is very volatile, though. We believe continuous growth of our business is made possible through stable profit performance. Adding foundry as another axis of our business is a solution. "

The companies cited the growing trend by Japanese chip manufacturers of outsourcing production as they move to fab-lite business models as the catalyst for the deal, as well as the success of last year’s announced collaboration between the two companies on copper/low-k processes and phase-change memory.

This is not the first time UMC has directly courted foundry business in Japan. In 2000, UMC and Hitachi established a Joint Venture 300mm foundry called Tricenti Technologies; however, the partnership was disbanded a few years later. Only 2 percent (approx.) of UMC’s foundry revenues in 2007 came from Japan, according to its financial statements.

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