Advanced Semiconductor Engineering (ASX) and Powerchip Semiconductor will together raise US$50 million to form Power ASE Technology in Taiwan.

ASE will contribute US$30 million and Powerchip will contribute US$20 million. The newly established company will lease approximately 6,800 square meters of production space in ASE's Chungli Campus for future production, and will start recruiting employees and installing equipment.

This newly established company will focus on memory IC related package and testing services. Mass production is currently scheduled for the end of 2006.

"ASE Group has historically focused on high-end core logic and ASIC package and testing services without extensive involvement in the memory semiconductor area. ", said Jason Chang, Chairman of ASE Group. "We believe the DRAM industry has become more consolidated than it was in previous cycles, with solid fundamentals, decreasing imbalance between supply and demand, and lower cyclicality risk."

Chang will serve as the Chairman of the new JV. Other members of the new JV's management team will be appointed soon.