Motorola and Siemens are to jointly invest #511 million in a new venture to develop 300mm wafer production technology for memory chips. The companies will be setting up a pilot production line in Siemens' existing plant in Dresden, Germany. That plant was chosen over Siemens' UK chip fab on Tyneside because of the pool of skilled labour in the area, and also because of German government funding. The 300mm process will replace the 200mm wafer technology used today in the mass production of memory chips. The two companies claim it gives cost savings of 30% and a 250% gain in production, and should be transferred to their main production sites around the world by 2001. "Achieving volume 300mm manufacturing will give both companies - and our respective customers - a significant competitive advantage," said Hector de Ruiz, president of Motorola's semiconductor products sector. The project will be subsidised by the German federal government and the State of Saxony where the plant is located. Research and development costs are expected to be over DM1 billion (#369.5 million) with additional investments of DM450 million (#166.5 million). The federal government is expected to contribute DM187 million (#69 million) and the State of Saxony DM120 million (#44 million). The Dresden plant currently employs 2,400 people, which will be boosted by 450 new staff for the "Semiconductor300" project. AMD is also building a plant in Dresden which is expected to employ 2,000 people, and in total it is estimated that the two plants will indirectly create about 13,000 jobs in the area. Siemens is the world's 12th largest chip manufacturer, and hopes the new technology will allow it to ramp up capacity to challenge the top five manu-facturers. Motorola pulled out of the competitive DRAM chip market last year to focus on more advanced memory chips, and its semiconductor division has been profitable in the last year due to high European demand for chips.
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