Renesas Farms Out Flash Production to Powerchip

Renesas Technology, one of Japan’s largest chip makers, has agreed to outsource production of some flash memory chips to a Taiwanese partner, a sign that demand for the chips remains strong.

The Japanese company will outsource production of older models of its flash memory chips used to store pictures and other digital data in mobile phones, digital cameras, digital music players and other devices to Powerchip Semiconductor.

Powerchip, in turn, will raise its projected 2006 spending on new plants and equipment to 70 billion new Taiwan dollars (US$2.18 billion) from NT$60 billion to ensure it has enough production lines ready to make the chips.

Earlier this year, Powerchip bought an empty chip factory from Macronix International, intending to install production line machinery slowly as the year went by. But the Renesas deal will speed up the pace of installation at the facility, Powerchip said.

The Taiwanese memory chip maker will start producing 4-gigabit flash memory chips for Renesas as part of the Thursday agreement, in addition to the 1-gigabit chips it began producing for Renesas earlier this year.

–Dan Nystedt, IDG News Service

For related news coverage, read Samsung to Launch Flash-Disk-Based Portable PCs.

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