NEC cedes Hiroshima fab control to Elpida

Retains ownership

Elpida has taken control of NEC's Hiroshima fab and will spin the management operation off as a subsidiary company, Hiroshima Elpida, on 1 September.

The central facility of the Hiroshima plant is its 200mm wafer production lines, which Elpida will lease from NEC - which, with Hitachi, is one of Elpida's parent companies.

Crucially, it's also the site for Elpida's 300mm wafer work, for which the company has been pursuing investment funding. To date, the company has won $50 million from Kingston Technology and $100 million from Intel, in addition to $430 million from other, unnamed sources.

The deal allows Elpida to take control of its key fab operations, an important move given its goal to become one of the world's top three DRAM producers through a strategy of focusing on high-end products,

The Hiroshima plants 1360 employees will join the Elpida subsidiary, which will pick up NEC's internal chip production contracts. Elpida expects the plant to generate revenue of ¥130 billion ($1.11 billion) come the company's 2005 fiscal year. ®