NEC and Elpida Form Display Driver Chip JV

NEC Electronics has announced plans to spin off its display IC business into a joint venture with Elpida Memory for display driver integrated circuit chips.

The JV will combine Elpida’s DRAM process technology with NEC’s driver IC development technology to accelerate shrinkage in die size. NEC will hold an 80% stake of the venture, with Elpida holding the remaining 20%.

The two chipmakers said they plan to tackle competition by combining their technologies and cut costs by outsourcing production to Elpida’s advanced chip fabrication plant in Hiroshima Prefecture.

Elpida, Japan’s only and the world’s third largest DRAM chip maker, also plans to start manufacturing system-on-chip products under other brands.

NEC plans to reduce its domestic production lines from nine to four by 2010, and consolidate its six chip plants to three.