Powertech joins Elpida-led wafer testing venture

Taipei, July 28, 2005 (CENS)--Taiwanese chip assembler Powertech Technology Inc. recently joined Japanese chipmaker Elpida Memory, Japanese chip-making equipment supplier Advantest and U.S.-headquartered memory-module supplier Kingston Technology to form a wafer-testing venture.

Elpida announced the partnership on July 26. For Taiwan's chip industry, the cooperation marks closer ties with Japanese chip industry following a number of alliance deals between the island's chipmakers and their Japanese counterparts. Over the past few years, United Microelectronics Corp. (UMC) acquired a chip-making factory from Nippon Steel Corp. and Advanced Semiconductor Engineering (ASE) Inc. acquired a test and packaging house from NEC.

The joint venture, to be called Tera Probe, will be eventually capitalized at 11.2 billion Japanese yen (US$361 million at US$1:NT$31). Elpida will spin off its wafer-sort unit as an asset of the venture. The Japanese chipmaker will control 33% of the venture, with Powertech holding a 23.2% stake, Kingston Technology Japan LLC 26.8% and Advantest 17%.

Powertech's executives pointed out that their company would be able to boost its competitiveness and integrate its supply chains through the cooperation. They noted that the venture would offer wafer-probing service, which comes before wafer cutting.

The Taiwanese chip assembler will buy five more Advantest-built T5593 testing machines sometime this quarter, bringing the total number of the machine at its production line to 19 from current 14 testers. New machines will help boost the company's testing capacity for double data rate (DDR) 2 memory chips to eight million chips a month by the end of this quarter, up from current 5.4 million chips a month. Elpida is among the company's major customers of the service.

Elpida has snatched up around 10% of world dynamic random access memory (DRAM) market. Its cooperation with Taiwanese DRAM chipmaker PowerChip Semiconductor Corp. is expected to help it shoot more share. Advantest is world's largest supplier of equipment for memory-chip manufacturing.