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Elpida Memory Inc., the sole domestic supplier of dynamic random access memory chips, said Tuesday it will establish a wholly owned semiconductor manufacturing subsidiary Sept. 1.

Elpida, primarily owned by NEC Corp. and Hitachi Ltd., said it has agreed with NEC that the manufacturing operations of NEC Hiroshima Inc. will be integrated into the new company.

The new firm, Hiroshima Elpida Memory Inc., will enable Elpida to establish a strong framework for its entire DRAM business, including device development and marketing functions, Elpida said.

“The formation of Hiroshima Elpida enables us to unify production and distribution as a DRAM manufacturer,” Elpida President Yukio Sakamoto said in a statement.

As part of the agreement, employees from NEC Hiroshima will be reassigned to Hiroshima Elpida. Hiroshima Elpida will lease from NEC Hiroshima its property and 200-mm wafer manufacturing facility, Elpida said.

Headquartered in Higashi-Hiroshima, the new firm will be capitalized at 25 million yen and employ about 1,360 people.