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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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