saifun.gifConventional thinking holds that Chinese intellectual property has little value to western technology firms. Think again.

Israeli chip company Saifun Semiconductors has agreed to purchase IP and know-how from SMIC, the largest chip manufacturer in China.

The relationship between the two companies moves SMIC closer to its goal of becoming a key player in the highly competitive flash memory market. SMIC started developing a memory chip based on Saifun's technology last year and it has already started shipping samples of the 2Gbit version of the chip. An 8Gbit version is due next year.

Although the devices will initially be produced under SMIC's own label, Saifun has now taken a license from SMIC for its 90nm process technology that will assist both companies in attracting other potential customers to use both companies' IPs in the key non-volatile memory markets.

According to an article on Fabtech, this move by Saifun and SMIC could also attract other flash producers to use SMIC as a foundry in the future as well as offer embedded solutions to Japanese chip manufacturers. Such a move would also help SMIC drive down its costs by getting higher levels of capacity utilisation — essential for this highly competitive market.

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