October 2, 2007 – Sony Corp. and Qimonda AG say they have agreed to create a 50/50 joint venture to design high-performance, low power, embedded and customer specific DRAMs for consumer and graphic applications.

The proposed venture, Qreatic Design, would be started up in Tokyo by year’s end, with up to 30 specialists from Sony and Qimonda. Tsuyoshi Kashiwagi (Sony) has been appointed as President and CEO of Qreatic Design, and Qimonda COO Thomas Seifert will serve as the JV’s chairman.

Qimonda brings its DRAM experience to the table from design to fabrication, while Sony has its own know-how to apply DRAM to finished products, they companies said in a statement.

What Qimonda gets out of the deal is support for future product designs and development, as well as a ramp in R&D capabilities in Japan, “an important and dynamic market for us [with] excellent R&D talents especially in the consumer and graphic area,” noted Kin Wah Loh, president/CEO of Qimonda.

For Sony, the JV is an avenue to leverage its DRAM design for products in new business areas, added Yutaka Nakagawa, executive deputy president, and officer in charge of Sony’s Semiconductor and Component Group (Semiconductor and Component).

While the deal is yet another example of how competitive the DRAM segment has become, it may not cause ripples anytime soon for market leaders. “This is not good news for DRAM makers such as Samsung, but not a serious threat to them either,” said Lehman Brothers analyst Chang-won Chung, quoted by MarketWatch. This Sony-Qimonda JV is a niche play to secure DRAM chips for Sony’s consumer electronics products, he said. “I don’t expect it to turn into a serious DRAM player competing against the current DRAM giants.”