X-FAB Semiconductor Foundries AG and 1st Silicon (Malaysia), a semiconductor foundry, have agreed to merge both companies. The move extends X-FAB’s business activities to the Asia/Pacific region and gives it access to manufacturing capabilities for 0.25, 0.18 and 0.13 micron technologies. The combined manufacturing capacity of the merged company will be approximately 700,000 200mm-equivalent wafers per year, and the sales of the new company are expected to exceed $300 million USD in 2006.