By Greg Gao

(JW Insights) Jun 29 -- Longsys(江波龙), a leading Chinese provider of flash and DRAM storage solutions, is paying $132 million for a 70 percent stake in a subsidiary of Powertech Technology, a world leader in IC packaging and testing services. With this move, the Shenzhe-based Longsys expands into the chip packaging and testing sector, Yicai Global reported on June 28.

The subsidiary, which is based in Suzhou, eastern China’s Jiangsu Province, will continue to provide packaging and testing services to its existing clients and will become a packaging and testing base for Longsys’ products, boosting its capacity utilization rate, the Shenzhen-based company said on June 27.

The deal will enable Longsys to cut production costs, respond quickly to clients’ orders and enhance partnerships with memory wafer plants, it added. Longsys also has the right to buy the remaining 30 percent equity should the two parties come to an agreement.

The Suzhou plant used to belong to US flash drive giant Spansion. It was taken over by Powertech in 2009 through a merger of its Singapore and Chinese units. It specializes in the packaging and testing of flash memory chips, memory chips and logic chips, according to the Yicai Global report.

Founded in 1999, Longsys focuses on memory chips and applications, with four product lines - embedded storage, mobile storage, SSD storage, and memory module. The company provides systematic solutions for personal data and industrial software and hardware storage products.