X-Fab Semiconductor Foundries has taken over ZMD’s ZFoundry, the company’s wafer production facilities located in Dresden, Germany, effective immediately.
The agreement announced today makes ZMD a fabless company focused on the automotive vertical and places ZFoundry as a subsidiary of Erfurt, Germany-based X-Fab. By acquiring ZFoundry, a wafer fab for 6-inch wafers with a technology range of 0.8 to 0.35µm, X-Fab expands its total manufacturing capacity 
by 15 per cent and brings its 8-inch equivalent wafer starts to approximately 70,000 a month.
In addition, the companies agreed to maintain close collaboration long-term regarding wafer manufacture, ensuring X-Fab will become the principal supplier of foundry services for ZMD which, in turn, becomes one of the top 10 customers of the X-Fab Group.
“We now have access to a substantially broader technology portfolio at smaller feature sizes, immediate 
access to 8-inch technology, and opportunities for second sourcing,” said Thilo von Selchow, CEO of ZMD. “At the same time, we maintain the close relationship between process and chip manufacture and, with Erfurt, we have another innovative technology site not far from Dresden. In addition, the arrangement meets a fundamental requirement for ZMD – guaranteed delivery of the respective technologies for at least the next 10 years – with the high quality required by the automotive industry. In this way, we can optimally fulfill the requirements of our demanding customers and achieve our planned 20 percent growth in 2007.”
ZMD said it will now focus on its core business, developing its analog/mixed-signal circuits, while exploring opportunities for further growth.
Financial details of the deal were not disclosed.