Elpida dives into foundry business with UMC

The DRAM giant will provide its 300-mm wafer manufacturing capacity to UMC, while UMC will contribute IP support and logic technologies to target Japanese foundry customers.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 3/17/2008

Elpida Memory Inc dove deeper into the foundry realm today, announcing an extension of its work with Taiwan-based United Microelectronics Corp to jointly pursue semiconductor foundry opportunities in Japan and a commercial agreement with Waltham, Mass-based Mears Technologies Inc, a provider of advanced silicon processes and engineering services to semiconductor device manufacturers and contract foundries. 

Under the UMC agreement, the Japan-based DRAM giant will provide its 300-mm wafer manufacturing capacity while UMC will contribute IP support and logic technologies. The joint effort will commence at Elpida’s 300-mm fab in Hiroshima for good proximity and ease of support for Japan-based foundry customers, Elpida said.

The alliance extends the joint development program that the two companies announced in October 2007 for Copper/low-k, DRAM, and phase-change random access memory (PRAM) technologies. The duo said that because that collaboration was “progressing well,” they decided to seek out further possibilities for joint development, as well as for cooperation in manufacturing.

“Since last October when we announced our first joint collaboration plans with Elpida, our successful progress and mutual understanding have prompted us to extend the scope of our partnership,” Jackson Hu, chairman and CEO of UMC, said in a statement today. “Utilizing UMC’s advanced Copper/Low-k backend of line (BEOL) process, Elpida has been able to demonstrate prototypes that achieve significant performance advantages for its next generation DRAM products.”

The two companies further noted the ongoing global trend to fab-lite strategies by IDMs.
Japanese IDM’s are no exception and are more increasingly terminating in-house process technology development and curtailing or eliminating capital intensive manufacturing activities.

“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, in the statement.

Elpida primarily focuses on DRAM, which has suffered from extensive drops in average selling prices in recent quarters. Electronics supply chain monitoring company Converge last week reported that the DRAM market lacks stimulation and is showing no immediate signs of a recovery.

“Elpida will continue to focus on DRAM manufacturing for mobile devices and digital consumer electronics customers,” Sakamoto said. “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.”

Elpida further today announced an agreement with Mears that will see the two companies will work together using Mears Silicon Technology (MST) for CMOS. Mears claims that its MST for CMOS technology will improve overall Elpida DRAM chip performance and reduce static power without introducing any new materials into existing manufacturing process flows.

"Partnering with Mears gives us access to a company deeply experienced in materials technology for device scaling," said Elpida CTO Takao Adachi in a separate statement. "This will help boost Elpida's memory products to a much higher technology level, especially in terms of power consumption."

Added Mears founder and president Robert Mears, "We are confident that our technology will help Elpida to increase market share with differentiated products -- without the need for sweeping changes in materials or huge investments in new equipment and facilities."