Strengthening the PC DRAM business means building large-scale and highly productive manufacturing lines and rapidly incorporating advanced process technology. To accomplish this in 2006 Elpida started to search in Japan and elsewhere around the world for the site of its next new fab to complement its Hiroshima Plant. One very attractive candidate location was Taiwan, whose government provides favorable tax treatment and other forms of assistance to the high-tech industry.
Around the time Elpida began its global site search PSC was in the middle of constructing a new 300mm fab in the Taichung Houli Science Park in Taiwan. As a PSC manufacturing partner, Elpida sent managers to visit the building site and they frequently met with PSC officials to devise a manufacturing plan. During this process the idea surfaced of turning the fab into a joint venture to help share the burden of capital equipment costs and achieve a faster manufacturing start-up. Since the investment cost in a new advanced fab is several hundred billion yen it seemed reasonable for Elpida and PSC to cooperate. Therefore, in December 2006 the two companies entered into a manufacturing joint venture agreement.
The partnership between Elpida and PSC began in March 2003, when the two entered into a strategic tie-up agreement. After Elpida transferred 100nm process technology to PSC in 2004 Elpida started to purchase PSC's PC DRAMs using Elpida's advanced process technology. PSC's fabs have extremely high levels of productivity which have been used as manufacturing benchmarks at Elpida's Hiroshima plant.
Rexchip represents a blend of the two companies' technology capabilities and knowledge. Elpida provides "advanced process technology" while PSC contributes "high productivity." In addition, the dedication of Rexchip's advanced manufacturing line to single product production has enabled the joint venture to become the industry's leading fab on the basis of product quality, cost competitiveness and supply potential.
