Germany's ZMD close to announcing chip partner

Germany's ZMD close to announcing chip partner
MUNICH, Germany — Zentrum Mikroelektronik Dresden GmbH (ZMD), an ASIC and memory maker in eastern Germany, is close to completing a government-brokered deal to form a partnership with another chip maker.

Details of the expected deal were to be announced today (Nov. 11) at Electronica '98, but a press conference was canceled.

Industry sources said the state government of Saxony, where ZMD is based, has been pressing the troubled chip maker — which runs older process technologies — to find a partner that can help it develop newer processes. A deal between ZMD and a potential Israeli partner fell through recently, sources said.

The government of Saxony retains control of ZMD, which is owned through Dresdner Bank AG and Commerzbank AG. The company's wafer fab was formerly owned by the East German government prior to the collapse of communism.

The new deal being negotiated by the Saxony officials is now expected to be announced by the end of November. Among those thought to have been interested in a partnership with ZMD is Tower Semiconductor Ltd. (Migdal-Haemek, Israel), a foundry operator specializing in non-volatile memory and CMOS image sensor processes.

Reuven Marko, vice president of sales and marketing at Tower, said that his company was conducting intensive discussions to secure a partner for a second fabrication facility, but said he was not aware of any discussions with ZMD. "We would prefer to build a new fab in Israel, just for logistical reasons, but we do need to do it with a partner," Marko said.