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To: Sam P. who wrote (61905)	11/27/2000 3:50:24 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

NEC, Hitachi To Invest 160 Bln Yen In DRAM Ops Merger Tuesday, November 28, 2000 TOKYO (Nikkei)--NEC Corp. (6701) and Hitachi Ltd. (6501) will merge their entire DRAM operations, the Nihon Keizai Shimbun learned Monday. The two companies, which integrated their DRAM design operations under a joint venture set up late last year, will build a 160 billion yen plant for the venture and transfer their DRAM production there. NEC and Hitachi intend to move their DRAM marketing operations to the venture early next year and to eventually take the company public, informed sources said. NEC and Hitachi are expected to announce the project Tuesday. Construction is slated to begin in Hiroshima early next year. The new factory will have a clean room that will be able to handle 20,000 12-inch wafers a month. One 12-inch wafer yields about two and a half times as many chips as its 8-inch counterpart and cuts production costs by 30%. The factory is expected to start mass-producing 256M and 512M DRAMs as early as the summer of 2002. NEC had an 8.8% share of the global DRAM market in 1999, while Hitachi's share remained at 4.8%, according to U.S. research firm Dataquest Inc. They lagged far behind market leader Samsung Electronics Co., with 20.7%, and runner-up Hyundai Electronics Industries Co., with 19.3%. But the two Japanese firms believe that fully integrating their DRAM operations will enable them to narrow the gap in market share with these South Korean companies by speeding decisions on capital investment and which chips to produce in line with demand trends. (The Nihon Keizai Shimbun Tuesday morning edition)