Hynix creates Chinese joint memory venture

Korean memory company Hynix is to enter into a joint venture with Chinese firm Wuxi Industrial Development in a move that will see it pick up a cool $305 million.

As part of the JV, it will sell testing and packaging kit worth $305 million and will concentrate on front end manufacturing and R&D investment.

Like other companies making memory, Hynix has been hit by a slump in sales of DRAM which has lasted for over two years now.

While $305 million sounds like a fairly large chunk of cash, it doesn’t go very far in the very competitive manufacture of semiconductors.  Building fabrication plants is expensive, but as there is overcapacity, Hynix is not likely to need to find the $2 billion or so to fund building new sites.

The memory companies have cut back on supply in an attempt to stabilize and lift the the price of DRAM but so far with very little success.

Essentially, the joint venture means that Hynix will outsource more back end manufacturing from 30 percent now, up to 50 percent. The joint venture is expected to start manufacturing within a year.