Korea's Dongbu strikes pack with Toshiba for silicon foundry entry

Korea's Dongbu strikes pack with Toshiba for silicon foundry entry
SEOUL -- South Korea's Dongbu Electronics Co Ltd. today announced a wide-ranging technology pact with Toshiba Corp. to gain access to advanced CMOS processes, IC design libraries, embedded flash memory, and analog cells for an entry into the silicon foundry business.

Under the agreement, Toshiba will invest $50 million in Dongbu's new 8-inch wafer fab during the next two years and gain access to an undisclosed portion of its output. Toshiba said the agreement falls is part of its strategy to expand the use of outsourcing partners for chip production.

The Korean company--a unit of the Dongbu Group chaebol--had attempted an entry into the chip business as a DRAM maker three years ago, but Korea's severe financial crisis derailed those efforts after a plant building was constructed in Eumsung. Now with Toshiba's backing, Dongbu plans to equip its empty fab shell for mass production of logic ICs on 8-inch wafers in 2001. The facility is expected to reach full capacity of 45,000 wafer starts a month within three years.

Dongbu will gain Toshiba's 0.25-, 0.18- and 0.15-micron CMOS processes and derivative technologies, under the agreement. In addition, the Korean semiconductor startup have access to Toshiba's intellectual property (IP) design cores, including standard cells, I/O, analog, and micro cells with embedded NOR-based flash memory, under the pact.

Toshiba said the initial quarter-micron process technology is well established at its wafer fab in Oita, Japan. That facility is now shifting its production to 0.18-micron technology. Toshiba said plans to train Dongbu engineers in development, production, and process technologies at its facilities in Japan. Toshiba engineers will also initially support manufacturing operations at Dongbu's fab in Korea.

Dongbu plans to offer its manufacturing services and access to Toshiba's IC cores to foundry customers under its own brand name. Dongbu Electronics was established in March 1997, and last year the company reported it had $148 million in capital. The company is a member of the Dongbu conglomerate, which has holdings in agriculture, chemistry, steel, finance, and insurance businesses.

In 1997, Dongbu had hoped to enter the competitive DRAM business with 0.25-micron technology licensed from IBM Corp., but the company's 300,000-square-foot plant was mothballed after it was unable to equip the $1.5 billion fab in the midst of the Asian economic meltdown nearly three years ago.