IBM's retreat from the volatile DRam manufacturing market has gained pace with the termination of its US joint venture with Toshiba.
Toshiba will buy Big Blue's 50 per cent stake in the US fab company, Dominion Semiconductor. The deal is scheduled to be completed by December 2000 and is believed to be worth up to $350 million.
Although IBM will retain some DRam design and production operations in locations worldwide, a representative at IBM revealed that the deal was part of its strategy to exit the low margin, commodity DRam market.
However, the manufacturer intends to continue its research in the field and will license the resulting technology to existing players in the market.
The representative added that since John Kelly was appointed head of IBM Microelectronics in March, the company's emphasis had moved away from DRam towards integrated chips. In May, Lou Gerstner, chief executive of IBM, underlined his intentions for the vendor to exit the competitive sector at an analysts' meeting.
The withdrawal from DRam has steadily gained pace. Earlier in the year, IBM and Infineon Technologies ceased DRram production and started making logic chips.
DRam prices have dropped from $7 to $4 for a 64Mb chip during the past three months. The volatility of the market caused Texas Instruments to end production in 1998, selling the operation to Micron Technology, the world's number two producer of such chips after Korea's Samsung.
Despite this, Toshiba was upbeat about the move. In a statement, the company said: 'Securing a full-fledged manufacturing site in the US will allow Toshiba to realise stable production and a supply of products best suited to meet market demand. It will significantly strengthen the company's presence in one of the world's central markets.'
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