Sakamoto was quoted by Bloomberg as saying Elpida would decide on its China strategy by December. According to the report, the company is looking to set up a manufacturing spot in China with a Taiwanese chipmaker, and to this end seeks support from the China government.

Elpida works closely with Taiwan-based Powerchip Semiconductor Corporation (PSC), ProMOS and Winbond Electronics. Among the DRAM partners, only ProMOS has a wafer fab that is ready to go in China.

ProMOS is among the few Taiwan-based companies eligible by government standards to set up 8-inch fabs in China. By the end of 2007 the construction of its Chongqing fab was completed with volume production originally slated for the second quarter of 2008. However, with the DRAM market in a state of oversupply for three years, the schedule was put on hold.

Sources also speculate Elpida may seek an alternative approach on its China strategy. The chip vendor firm could resume its plan to cooperate with China's Suzhou Venture Group (SVG) to jointly set up a 12-inch fab in Suzhou, Jiangsu province.

Elpida originally planned to establish a joint venture with China's SVG before the end of 2008. The JV would be located on a site area of 320,000 square meters, and produce DRAM at a 12-inch wafer fab in Suzhou.

In addition, Sakamoto was quoted by Bloomberg as saying Elpida is looking to add a new factory at subsidiary Rexchip Electronics with a plan in place within the next four months.

Rexchip, a DRAM-manufacturing joint venture between Elpida and PSC, had its first 12-inch fab begin volume production in the third quarter of 2007. According to Rexchip's website, it plans to construct a total of four 12-inch fabs at the Central Taiwan Science Park (CTSP).