In a move to rebuild its semiconductor business, Kobe Steel Ltd. will form a business alliance with U.S. chip giant Micron Technology, Inc., ending its joint venture with Texas Instruments Inc., the three firms announced Friday.

Under the tentative agreement, Micron will acquire from TI a 25 percent equity stake in KTI Semiconductor, Ltd., a chip manufacturer established in Hyogo Prefecture in 1990 by TI and Kobe Steel.

Kobe Steel will maintain its 75 percent share in the joint venture, according to the agreement. KTI currently manufactures 16-megabit and 64-megabit DRAM chips.

With the new agreement, Kobe Steel hopes to improve KTI’s business by fiscal 1999, the firm said. Micron at the same time will gain a production facility in Japan through equity participation in KTI.

Due to the oversupply of memory chips worldwide and the steep fall in DRAM prices, KTI’s business performance has been sluggish since 1996. “We are looking forward to improving KTI’s competitive position by combining its advanced production technology, high level of plant management and outstanding human resources with Micron’s advanced process technology,” said Masumi Sato, Kobe Steel’s executive vice president.

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