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Sharp Announces Strategic
Agreement with UMC Group Foundry NFI
Sharp to Invest 7
Billion Yen to Secure Access to Capacity for Advanced Technologies
at NFI's Fab
Tokyo, Japan, November 2, 2000--Sharp Corporation and Nippon
Foundry Incorporated (NFI), a UMC Group foundry company (TAIEX:
2303, NYSE: UMC), announced today a long term foundry supply
agreement aimed at meeting Sharp's fast-rising demand for flash
memory and other advanced semiconductor devices required for
cellular telephones and other digital equipment. Sharp has agreed
to invest 7 billion yen (US$ 64 Million) in NFI to ensure it
has access to the capacity it requires.
In order to optimize its resource allocation,
Sharp will leverage the combination of advanced process technology
and manufacturing efficiency offered by NFI to meet the rising
demand for its flash memory products. The initial capacity
agreement is for 6,000 wafers per month (8-inch equivalents),
with this number expected to increase to 10,000 wafers per
month by 2002. Production will take place at NFI's Tateyama,
Chiba facility, and is expected to begin in the second half
of 2001.
Sharp's capital investment of 7 billion yen will
supplement NFI's expansion to meet Sharp's manufacturing requirements.
The NFI Tateyama facility will be upgraded from the
current planned capacity of 34,000 8-inch wafers per month
to 40,000 wafers per month. Total required investment for
the NFI expansion is 26.0 billion yen (US$ 238 million).
This alliance between Sharp and NFI symbolizes
the trend towards strategic long-term foundry partnerships
between suppliers and purchasers, and away from contracts
for simple procurement purposes. The joint investment by Sharp
and NFI to expand capacity is intended to serve as the foundation
for a long-term relationship between the two companies. UMC
has also committed to fully support this relationship by giving
Sharp direct access to its industry leading sub-0.18-micron
capacity.
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