Japanese supplier of Dynamic Random Access Memory (DRAM) Elpida Memory and Winbond Electronics Corp. today announced that they have signed a Memorandum of Understanding (MOU) for DRAM foundry services that will see Winbond manufacture DRAMs under contract to Elpida.

The companies said that the outsourcing agreement is the first step of a business partnership they intend to pursue further.

The agreement pertains to the supply of GDDR3 and GDDR5 graphic DRAMs for Elpida. Prior to this agreement Winbond and Elpida have been working together to commercialize GDDR3 and GDDR5 DRAM products. Winbond is preparing to begin commercial production of these products by the end of 2009 while Elpida plans to begin purchasing the output in the first half of 2010.

Under the agreement, Elpida and Winbond will now embark on a more formal business relationship. As a first step Elpida will provide Winbond with advanced DRAM process technology and product technology and in return Winbond will allocate certain capacity at its wafer fabs in Taichung to manufacture these DRAM products. Elpida will purchase the product output and sell it to major customers under its own corporate brand name.

"The partnership we are forming with Winbond is tremendously satisfying," said Elpida president and CEO Yukio Sakamoto. "The combination of Elpida's advanced technology and Winbond's rich product manufacturing experience, which includes graphics memory, will enable us to expand our product lineup across a wide range of applications."

"Winbond is pleased to form a business partnership with Elpida, world-leading DRAM supplier, starting with a graphic DRAM foundry by using current technology. However, to make this partnership a long and lasting relationship, I believe implementing next generation DRAM process technology from Elpida into our fab will be the best solution for both of us. It will enhance the competitiveness of our specialty DRAM, Mobile RAM as well." said Arthur Chiao, CEO & Chairman of Winbond Electronics Corporation.

The agreement with Winbond puts four Taiwanese DRAM manufacturers in Elpida's camp, versus two for Micron. Winbond joins ProMOS Technologies, which inked an outsourcing deal with Elpida last week, and Powerchip Semiconductor, a long time Elpida partner. Micron has signed up Nanya Technology, and together they operate joint venture Inotera Memories.