January 26, 2007 – A month after making a splash with plans to create a DRAM megafab joint venture, partners Elpida Memory Inc. and Powerchip Semiconductor Corp. have finalized some of the details, including the name of the venture, initial investment levels, and a schedule for equipment installation and mass production.

The new venture, dubbed “Rexchip Electronics Corp.”, will begin operations in April at the Central Taiwan Science Park Houli Site with about 1200 employees, and with ownership and capacity evenly split 50/50 between the companies. The initial investment plan calls for $1.22-$1.52 billion to achieve capacity of 30,000 300mm wafers/month. Equipment installation is slated for 2Q07, with mass production achieved in 3Q using Elpida’s 70nm process technologies, and product shipments starting by year’s end.

In December, the two firms made waves by proposing they will ultimately jointly operate four 300mm DRAM fabs with 240,000 wafers/month total capacity. For PSC, the partnership provides a way to rapidly expand its DRAM manufacturing scale will securing next-generation process technology from Elpida, as well as sharing development activities and operation efficiencies.

PSC had been considered one of the most aggressive suitors for a potential fab partnership with Elpida, with public visits together to lobby for Taiwan government fab investment incentives. Last fall, PSC also proposed raising around $363 million through issuance of global deposit receipts, which was interpreted to only make sense for funding an Elpida-PSC JV, given PSC’s abundant cash reserves and stagnant share price.

Elpida, meanwhile, had already indicated it would not seek a fab in Japan without competitive tax breaks or subsidy incentives, and was courting various fab partners in Singapore and mainland China, but reportedly chose Taiwan due to domestic chipmakers’ proven ability to operate 300mm fabs efficiently, according to the Taiwan Economic News. Powerchip and ProMOS Technologies Inc. have run their 300mm fabs at 85% and 80% capacity utilization, respectively, while Inotera Memories Inc. has seen utilization top 100%, the paper noted.