Agere Systems and RF Micro Devices (RFMD) have announced the signing of an agreement to form a strategic alliance for the development, design and manufacture of high-performance chips

Under part of the agreement, RFMD will invest roughly $58m over a two-year period for the upgrade of clean room facilities and purchasing of semiconductor manufacturing equipment.

Agere Systems and RF Micro Devices will collaborate on the design and manufacture of RF chips based on silicon germanium (SiGe) technology. In addition, the alliance will encompass Agere's other silicon processes.

The two companies are planning to create and staff a RF centre of excellence to advance RF chip process technology and design methodology. Both companies hope that the centre will be able to offer comprehensive solutions for multiple wireless technologies such as digital cellular phones, wireless local area networks, and Bluetooth wireless connectivity.

This recent alliance is an expansion on an earlier co-operation between the two companies, to bundle power amplifiers with other wireless chips into a complete chipset for digital cellular handsets.

"Working with RF Micro Devices, a leader in RF chip technology, gives us the opportunity to further advance our silicon germanium technology and develop more highly integrated wireless chips with better performance and lower power consumption," said Greg Waters, vice president of the Wireless Business Unit at Agere Systems. "Together, the two companies will work to accelerate the delivery of key semiconductors required for the deployment of next generation wireless multimedia services on public and private networks, and lower the overall cost of complete wireless component solutions to our customers."

"Agere has advanced chip process technology and manufacturing capability as well as extensive communications system expertise," said Jerry Neal, executive vice president of marketing and strategic development for RF Micro Devices. "This alliance provides us with the silicon manufacturing capacity we need to better serve our customers, and facilitates the expansion of our RF product portfolio beyond our market-leading power amplifiers. In addition, we believe the alliance will enable RF Micro Devices to help define and develop next-generation silicon processes for wireless applications, while providing a framework for our two companies to collaborate on the development of new wireless products."