October 12, 2001 – Tokyo, Japan – Canon Inc. and Toshiba Corp. will form a technical alliance to develop next-generation silicon wafers expected to improve the processing speed and energy efficiency of semiconductors, sources at the companies said.

The firms are banking on increased demand for chips with even higher operational speeds on the back of the boom in broadband applications.

Chips made from the wafer — SOI wafer — are said to operate 30% faster than existing alternatives and cut power consumption by more than half.

The wafer will also facilitate the denser integration of semiconductors and eventually pave the way for the development of information devices running on solar batteries.

Canon has been conducting research on SOI wafers since 1990 and has a production line for test products, which Toshiba will use to make chips and give technical advice on improvements.

Canon and Toshiba face rivals such as Shin-Etsu Handotai Co., a subsidiary of Shin-Etsu Chemical Co., as well as start-ups in the US and France.

With SOI wafers projected to make up 5% of silicon wafer demand by 2005, Canon is hoping for lucrative profits by concentrating on the high added-value wafer.

Toshiba plans to tap the new technology to produce as early as 2004 an ultra-small microprocessor and a system chip for use in digital home appliances and telecommunication devices.