Another Taiwanese dynamic random access memory (DRAM) chip manufacturer has decided to cooperate with Japan's Elpida Memory Inc. to enhance its competitiveness in the South Korea-dominated DRAM sector. Winbond Electronics Corp. announced Wednesday it has signed a memorandum of understanding (MOU) on DRAM foundry services, under which Winbond will manufacture graphics double data rate (GDDR) memory chips for Elpida, the world's third largest DRAM supplier. A Winbond executive said his company will begin to manufacture GDDR 3 and GDDR5 DRAM chips for Elpida with its own technology from the first quarter of next year. From mid-2010, the spokesman said, Winbond will begin to use advanced Elpida technology to produce a new generation of GDDR products to be sold to the Japanese firm's major customers under the Elpida brand name and will also produce niche market DRAMs for Elpida on a contract basis. In the future, he said, Winbond will also be allowed to use Elpida-developed technology to produce its own DRAM products. According to reports from Japan, Elpida and Winbond will embark on a more formal relationship under the new agreement. 'The partnership we are forming with Winbond is tremendously satisfying, ' said Elpida president and CEO Yukio Sakamoto at a news conference held after the signing ceremony that took place in Tokyo Tuesday. 'The combination of Elpida's advanced technology and Winbond's rich product manufacturing experience, which includes graphics memory, will enable us to expand our product lineup across a wide range of applications,' Sakamoto said. Winbond CEO and Chairman Arthur Chiao looked ahead to the long-term competitive advantages the tie-up with Elpida could have for his company. Chiao was quoted as having said at the same occasion that Winbond was pleased to form a business partnership with Elpida, starting with a graphics DRAM to be made with existing technology. 'However, to make this partnership a long and lasting relationship, I believe bringing next generation DRAM process technology from Elpida into our fab will be the best solution for both of us. It will enhance the competitiveness of our specialty DRAM and mobile RAM as well,' he said. Winbond is the latest of Taiwan's major DRAM suppliers to team up with Elpida. Others who have cooperated with the Japanese chip giant are ProMOS Technologies and Powerchip Semiconductor. Nanya Technology and Inotera Memories (a joint venture of Nanya and U.S.-based Micron Technologies) form a competing camp in Taiwan based on the technology of the U.S. company. Taiwan's DRAM industry has been bleeding money over the past two years because of overcapacity and slumping demand. It boasts six of the world's top 10 DRAM manufacturers but holds a global market share of only 15 percent. Local producers have sought foreign partners to help improve core technologies and help them expand markets in the face of heavy competition from South Korean competitors. In addition to forming partnerships with private Taiwanese DRAM makers, Elpida is also in talks on joining a project initiated by Taiwan's government to form a Taiwan Innovative Memory Corp. in an effort to develop sophisticated DRAM technologies. 