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Major Japan chipmakers may build joint plant

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CIOL Bureau
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TOKYO: Eleven of Japan's major semiconductor makers, including Hitachi Ltd.

and NEC Corp, are investigating a possible joint company to produce

next-generation chips, Japanese media said on Sunday.

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Quoting sources close to the issue, the Nihon Keizai Shimbun business daily

(Nikkei) said the project, the first of its kind, could start building a plant

to produce next-generation chips as early as next year.

Although Japanese chipmakers have tied up in technological development

before, this would be the first such agreement involving production. Through the

project, the firms -- which also include Mitsubishi Electric Corp, Toshiba Corp,

Fujitsu Ltd., Oki Electric Industry Co and Matsushita Electrical Industrial Co

-- would aim to cut plant construction costs, estimated at around 200 billion

yen ($1.52 billion), the Nikkei said.

Confirmation of the report from the firms involved was not immediately

available. Details of the project, including the investment to be made by each

company and the final number of firms to take part, would be worked out through

negotiations beginning as early as next spring, it quoted the sources as saying.

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Japanese chipmakers are battered by huge losses, making it difficult to come

up with the funds necessary to match investment being made in next-generation

chips by rivals in the United States and South Korea. The new plant would

produce chips with a line width of 0.10 micron or less for the participating

companies, with production focusing on system chips with large data processing

capacity for use in digital televisions and communications equipment, the Nikkei

said.

It quoted the sources as saying that the companies would sell chips produced

by the plant under their own brand names.

(C) Reuters Limited.

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