Toshiba signs MoU on JV for system LSI assembly and testing service in China

TOKYO, JAPAN: Toshiba Corp. announced that Toshiba and its Chinese subsidiary, Toshiba Semiconductor (Wuxi) Co., Ltd. (TSW), have signed a memorandum of understanding with Nantong Fujitsu Microelectronics Co. Ltd, a Chinese major back-end process specialist, on forming a manufacturing joint venture in China for the semiconductor back-end process. The companies expect to enter into a definitive agreement in January 2010 and to establish the joint venture in April 2010.

In the system LSI business, Toshiba is focusing on the front-end process in its operations and transferring the back-end process of assembly and testing to specialist partners. In promoting this strategy, TSW will transfer its LSI back-end process to a joint venture with NFME, which is seeking to expand and strengthen its business in this area.

The MOU calls for TSW to fold its back-end process facilities into a joint venture that will be initially 80 percent owned by TSW and 20 percent by NFME. The JV's initial investment ratio may be adjusted in the next few years among the parties, if NFME decides to exercise an option to increase its holding in the JV to take a majority interest.

Through this cooperative relationship, Toshiba will regard NFME as a strategic partner in the back-end process area. TSW will retain capabilities in manufacturing management and function as a local base for Toshiba to promote an outsourcing system for the back-end process.

Toshiba's recent measures in the system LSI back-end process include establishing a new joint venture in Japan in order to accelerate outsourcing of the back-end process. The proposed JV with NFME builds on and extends this strategy.