Elpida in talks with Powerchip on DRAM plant-paper

TOKYO, Sept 10 (Reuters) Japan's Elpida Memory Inc. has entered talks with Taiwan's Powerchip Semiconductor Corp. and local authorities about building a joint memory chip plant in Taiwan, the Nihon Keizai newspaper reported on Sunday.

Elpida, the world's fifth-largest maker of dynamic random access memory (DRAM) chips, said last month that it could spend up to 1 trillion yen (.55 billion) to build a new DRAM plant, possibly teaming up with either Powerchip, China's SMIC , or the Singapore government.

The Nihon Keizai said Elpida Chief Executive Yukio Sakamoto and Powerchip Chairman Frank Huang met Minister of Economic Affairs Chen Ruey-long on Thursday to request tax incentives and subsidies for building the factory in Taiwan.

No-one at Elpida was immediately available for comment.

Elpida will take Taiwan's offer and compare it against terms offered by China and other candidates, the newspaper said.

Both Powerchip, Taiwan's top memory chip maker, and Semiconductor Manufacturing International Corp. (SMIC), China's largest maker of made-to-order microchips, are Elpida manufacturing partners.

Sakamoto told Reuters in an interview last month that he hopes to start operations at the new plant as early as during the fiscal year that ends in March 2009. The new plant will have the capacity to process 100,000 300-mm silicon wafers a month.

Elpida is already in the middle of an aggressive capacity expansion drive at its flagship plant in western Japan's Hiroshima prefecture, aiming to boost its monthly capacity to 100,000 wafers by March 2009.

REUTERS DKS PM1915