Two Taiwanese Chip Makers' New Deal

Two chip makers from Taiwan deal to meet surging demand for flash memory. Powerchip Semiconductor is going to cooperate work with Macronix International to co-develop 100-nanometer manufacturing technology as the first step in a five-year technology research partnership. Macronix is also going to farm out production of some of its chips to Powerchip, a deal expected to last seven years, the two companies said earlier.

Powerchip also have said it would pay Macronix US$163.5 million for a 12-inch chip plant. Macronix built the shell of the plant years ago, but a chip industry downturn caused the company to delay outfitting it with production equipment. Chip manufacturing technology is measured in nanometers, a description of the size of the smallest feature that can be created on the chip's surface. A nanometer is a billionth of a meter.

The 100-nanometer chip technology Macronix and Powerchip plan to develop is not as advanced as the 65-nanometer production lines already in use at some companies. Advances in chip production technology jumps are important because they enable chips to be made smaller, speedier and more energy efficient.

Macronix develops NOR flash memory chips, which are most commonly used in mobile phones, as well as Mask ROM chips.

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