Elpida Memory Inc will start making semiconductors for use in liquid crystal display televisions for NEC Electronics Corp in October, the Nikkei business daily reported on Tuesday.

The outsourcing deal will allow Elpida, a struggling maker of computer memory chips seeking financial aid from the government, to diversify its operations, reducing its reliance on the volatile DRAM chip market.

Elpida will produce the equivalent of 2,000-3,000 300-mm wafers worth of LCD drivers a month, using idle DRAM production lines, the Nikkei said.

Separately, the Nikkei reported that the government will on Tuesday authorise Elpida's participation in a new programme that allows for the state to inject public funds into struggling companies.

Sources have told Reuters that the Development Bank of Japan is prepared to buy some 30 billion yen worth of preferred securities in Elpida as part of a state-backed support package that is also expected to include loans from private banks.

By: DocMemory
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