The world's two largest memory chip manufacturers agreed to join hands to develop next-generation semiconductors to enable South Korea to stay ahead of rivals in this critical industry, the government said Thursday.
Samsung Electronics Co. and Hynix Semiconductor Inc. said they will jointly invest 9 billion won in a broader state-supported research and development (R&D) program to acquire the necessary technologies to make future memory chips, the Ministry of Commerce, Industry and Energy said.
Under the three-stage plan that began in 2004 and runs until July 2011, a total of 52.58 billion won will be spent so that South Korea will be able to design and build such futuristic chips as spin torque transfer magnetic random access memory (STT-MRAM) and various non-volatile memory devices.
The government is footing 28.45 billion won of the total cost, with Seoul expecting to use the technologies developed to grab 40 percent of the non-volatile memory market by 2012. Samsung and Hynix plan to invest their share this year and in 2009.
The ministry said these future chips promise new potential for electronic devices because manufacturers could overcome the current 40-nanometer integration ceiling of flash memory units. Non-volatile memory devices are gaining importance because of their ability to store information even if power is turned off.
"The cooperation is the first since local companies worked together to make the 64Mb DRAMs in the 1990s," Cha Dong-hyung, head of the semiconductor and display division at the ministry said.
He said Samsung and Hynix plan to regularly exchange information on technological gains and cross-examine and evaluate advances made by the two companies as part of their joint R&D effort.
The expert said the cooperation between the two companies is vital because Japan's Toshiba, NEC and Fujitsu have joined forces and agreed to spend 3 billion yen from 2006 to 2010 to develop STT-MRAM.
"Because South Korea was a late starter in the memory chip field, local companies pay hundreds of millions of dollars every year to companies like Intel and Toshiba that hold patents to DRAMs and NAND Flash memory devices," Cha said. He said by conducting R&D, South Korean companies could develop and hold patents to technologies for future chips and avoid paying royalties.
Samsung and Hynix, meanwhile, agreed to buy patent rights for the development of polymer random access memory, resistant random access memory and chalcogenide random access memory chips, that were developed with state support.
Purchasing the eight patent rights related to these memory chips will put the two companies in a good bargaining position when they need to use related technologies developed by other companies.