U.S.-based Micron Technology and Taiwanese company Nanya Technology announced an agreement signed today to invest a total of $1.1 billion in a new DRAM company in Taiwan by the end of 2009. The two firms will also jointly develop new DRAM chip technology using sub-50 nanometer processes.

Currently Qimonda and Nanya are technology partners under a similar agreement and Nanya says it will not renew the agreement once the two companies are able to produce chips using 50 nanometer processes according to PC World.

At the point that the 50 nanometer magic number is met, Qimonda will lose its technology partner with which it has shared research and development expenses. How the loss of Nanya will affect Qimonda is unknown. Qimonda got into the DRAM business in an interesting way. When Infineon was forced out of the DRAM business by fines totaling around twice its net yearly profits the DRAM operations went to Qimonda.

Nanya and Micron will each hold 50% of the newly formed company to be called MeiYa Technology Corporation. The initial use for the joint $1.1 billion investment will be to refit an existing Nanya factory in Taiwan into a 300mm DRAM manufacturing facility.

Another unanswered question to come from the parting of ways with Nanya and Qimonda is what exactly will happen to the company the two firms jointly own in Taiwan called Inotera Memories.