Elpida to invest in Chinese DRAM plant

SINGAPORE – Japanese memory-chip maker Elpida signed a deal on Wednesday to invest in a joint-venture DRAM (dynamic RAM) fabrication plant to be constructed in eastern China, a move that will boost the company’s monthly production capacity.

Elpida will hold a 39 percent stake in the venture, which has not been named. The company will also contribute some of the US$720 million that backers, including Suzhou Venture Group, will invest in the plant. The remainder of the construction costs will be covered by loans, Elpida said, adding that the total cost of the plant may eventually reach $5 billion.

The news comes at a time when the price of DRAM is falling as Chinese officials crack down on priated electronic goods.

The plant will be built in Suzhou, a city in eastern China that is not far from Shanghai, and will have a monthly production capacity of 40,000 300-millimeter wafers when it comes online during the first quarter of 2010. Over time, that production capacity will be expanded to 80,000 wafers, raising the level of investment required to around $5 billion.

Elpida will purchase all of the chips produced by the factory, which will be used to meet growing Chinese demand for memory chips, the company said.

The first DRAM chips produced by the factory will be made using Elpida’s 50-nanometer production process, and will move to a 40nm process over time, Elpida said.

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