Japanese company Mitsubishi Electric is to take an equity share in a Taiwanese chip manufacturer.
Powerchip Semiconductor is to issue $NT 6.3 billion worth of shares and Mitsubishi will take a nine per cent share in the company, it said.
The deal will allow Mitsubishi to make its semiconductors far more cheaply and will help it to turn round its chip division, which is currently making a loss. According to Powerchip, it will use the money it raises from the share issue to fabricate 64Mbit Drams. As part of the deal, Mitsubishi will license some of its own advanced chip technology to the Taiwanese firm, including 256Mbit and circuit etching technologies.
This is not the first time that one of the large Japanese conglomerates has invested in Taiwan as both Toshiba and Fujitsu subcontract chip technology there. Sources at the Computex trade show in Taipei said at the beginning of last month that there was overproduction of Drams in Taiwan, as well as in South Korea and Japan. The fledgling Taiwanese semiconductor industry is looking at ways to diversify because of a drop in demand for chips worldwide.
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