Kobe Steel Ltd. said Monday it plans to place its copper lead-frame operations under the control of a subsidiary Oct. 1 in an effort to cut production and other operational costs.

Kobe Steel will place its stamping operations under the auspices of Leadmikk Ltd., a subsidiary based in Fukuoka Prefecture that is 75 percent owned by Kobe Steel and 25 percent owned by lead-frame maker Metek Kitamura Co.

It will establish a new company to take control of the combined business, it said.

The new firm, which will be named Kobe Leadmikk Ltd., will be capitalized at 1.8 billion yen, of which Kobe Steel will provide 75 percent and Metek Kitamura the remainder, Kobe Steel said.

Based in Kitakyushu, Kobe Leadmikk will engage in lead-frame stamping and lead-frame plating, according to the firm.

Kobe Steel said the merger is expected to boost the competitiveness of its lead-frame and copper strip operations.

Kobe Steel produces copper sheets and strips, and stamps them into lead-frames used primarily in power transistors.

Kobe said it holds a 25 percent share of the world market for lead-frame copper strips.

Lead-frames are metal frames upon which semiconductor chips are placed and provide electrical connections for finished packaged devices.