Japan's Renesas Technology and Taiwan's Powerchip Semiconductor will launch a memory-chip design joint venture in February.
Both companies will contribute engineering resources to the venture, which will be called Vantel and will specialise in design of advanced memory devices.
Vantel is expected to enable both companies to produce memory chip designs with better performance at lower cost. They said it would also enable them to "overcome the key issues they are currently facing".
Renesas needed more capacity to produce advanced memory chips and Powerchip was in need of greater design capacity, a spokesperson for Renesas in Tokyo, Motokazu Isozaki, said.
The company will be headquartered in Tokyo and its president will be Shigeru Mori, the general manager of Renesas' memory business unit. Powerchip will own 65 per cent of Vantel and Renesas will hold the remaining 35 per cent stake.
News of the joint venture comes a month after Renesas said it would take a 37 per cent stake in Retronix Technologies, a subsidiary of Powerchip that specialises in system solutions. As part of the deal Renesas was due to begin jointly managing Retronix Technologies' operations in this month.
Renesas Technology itself is a joint venture of Hitachi and Mitsubishi Electric. The company was the world's sixth largest chip maker in 2006, according to a December report from iSuppli. With estimated revenue for the year of $US8.2 billion the company placed ahead of several better-known names including AMD and Hynix Semiconductor.
Powerchip specializes in DRAM flash and system LSI chips and maintains strong ties with Renesas and another Japanese chipmaker, Elpida Memory.