Japanese giants Hitachi and NEC are to jointly set up a memory company that will begin operations in April and ship the first products in 2001.
The formation of NEC Hitachi Memory will help ensure the duo continues to sell Drams in high volumes despite heavy competition from rivals Samsung, Hyundai and Micron.
The combined force has set itself ambitious plans to grab 20 per cent of the global Dram market - an increase of two per cent from the stakes Hitachi and NEC currently control as separate companies. This would also push up joint revenue to $5 billion by 2002 and company officials warned that if those targets were not met, the joint venture would not survive the volatile memory business.
The venture, based in Tokyo, will employ 200 engineers from each company to develop 256Mbit and 512Mbit Dram chips. Manufacturing will be done using 0.13 micron technology and take place in both in Japan and Singapore.
The deal is Hitachi's second Dram partnership following an earlier 1Gb Dram development agreement with Mitsubishi and Texas Instruments (TI). That deal was cancelled when arch rival Micron bought TI's memory division in 1998, which led to TI abandoning the market.
NEC and Hitachi are not the first Japanese companies to combine efforts in the DRAM market. Fujitsu and Toshiba have an ongoing project to develop a 1Gbit chip.
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