JAPAN'S Sony and Germany's Qimonda AG said today they have agreed to form a joint venture to design high-performance DRAM memory chips for consumer and graphic applications.

The 50-50 joint venture, to be called Qreatic Design, will be based in Tokyo and is expected to start operations by the end of this year, the companies said in a joint statement.

The joint venture is expected to start with up to 30 "specialists" from Sony Corp. and Qimonda, the companies said.

Financial terms of the joint venture agreement, subject to regulatory approvals and other closing conditions, were not disclosed.

Their partnership highlights the growing competitiveness in the DRAM industry.

The capital-intensive sector has forced many of the global chip makers to seek joint ventures or form strategic alliances to share technology, design and production costs.

In 2004 Qimonda rival Hynix Semiconductor Inc of South Korea formed a joint venture with STMicroelectronics NV of Geneva.

Sony, which has been reviewing strategies for its chip operations amid hefty investments needed to keep developing new chips on its own, is reportedly in talks with Toshiba Corp for a plant that makes the central processor used in its PlayStation 3 game consoles.

Sony is looking to focus more on chips where it can maintain higher profit margins.

Samsung Electronics Co of South Korea was the largest producer of non-computer DRAMs in 2006, followed by Elpida Memory Inc, Qimonda, Micron Technology Inc and Hynix Semiconductor, according to market researcher Gartner Dataquest.