Hitachi, Toshiba, Renesas link in chipmaking

TOKYO: Japan's Hitachi Ltd., Toshiba Corp. and Renesas Technology Corp. plan to jointly produce next-generation system chips to cut costs, business daily Nihon Keizai reported on Wednesday.

The paper said Toshiba, the world's No.7 chipmaker, Hitachi and Renesas would begin preparations for joint development of system chips with 65-nanometre circuitry or less by setting up a joint venture in January.

The alliance plans to begin production by 2007, it said.

As chip technology moves to finer circuitry, the costs of production facilities grow. With the exception of giants such as Intel Corp. and Samsung Electronics Co., most chip makers are finding it hard to shoulder the burden alone.

An Hitachi spokesman said nothing had been decided, while a Toshiba spokesman and a spokeswoman at Renesas, a joint venture between Hitachi and Mitsubishi Electric Corp., declined to comment. Unlisted Renesas is the world's fifth-largest chipmaker.

The paper said the three companies are inviting other chipmakers such as Matsushita Electric Industrial Co. and NEC Electronics to join, and plan to invest up to 100 billion yen ($851.6 million) to create a production line.

The Mainichi newspaper separately reported that the alliance will eventually invest about 300 billion yen to build a factory to make chips with circuit widths of 45 nanometres. A nanometre is one-billionth of a metre.