TAOYUEN, Taiwan -- After months of negotiations, Nanya Technology Corp. here and Germany's Infineon Technologies AG today announced a non-binding memorandum of understanding to co-develop next-generation DRAM processes for 300-mm wafers at the 90-nm and 70-nm technology nodes.

The widely expected agreement also calls for the two companies to set up a 50:50 joint venture to produce DRAMs and to build a new 300-mm wafer fab in Taiwan.

The first 300-mm (12-inch) wafers are expected to be in production at the joint-venture factory by the end of 2003. The first stage production should reach a capacity of 20,000 wafer starts per month by the second half of 2004. The joint venture will be based in Taoyuen, close to Nanya's current production facility. The transaction still requires approval by the antitrust authorities, said Infineon and Nanya.

"With this MoU we are systematically expanding the cooperations with Taiwanese partners," said Ulrich Schumacher, president and CEO of Munich-based Infineon. "We are resolutely strengthening our position in Asia and increasing our share in the worldwide market for memory chips."

Infineon is aiming to increase its DRAM market share from about 13% of the memories sold in the market place in the past year. It is behind Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc., which decided this week not to sell its memory business to Micron Technology Inc. and create the world's largest DRAM maker (see April 30 story).

Based on the agreement, the two companies will jointly develop the new 90-nm (0.09-micron) and 70-nm (0.07-micron) production technologies at Infineon's 300-mm wafer plant in Dresden, Germany, and also use the advanced processes in the new joint-venture facility in Taiwan. Production of 300-mm wafers using the new 0.09-micron process will start in the Taoyuen joint-venture plant in at the end of 2003.

In addition, the two companies said they planned to deploy the 0.09-micron production technology for use on 200-mm (8-inch) wafers. The joint-process development will use Infineon's advanced DRAM trench-capacitor technology for 300-mm wafer processes. That technology is being licensed to Nanya.

"Our cooperation with Infineon represents a major step toward the combination of both company's strength in the trench DRAM technology development and manufacturing," said Jih Lien, president of Nanya Technology.

Infineon said the production joint venture in Taoyuen will be integrated into its international cluster of DRAM production sites, which comprises the company's facilities in Dresden and Richmond, Va., as well as ProMOS Technologies Inc., a joint venture with Mosel Vitelic Inc. in Hsinchu, Taiwan.