November 21, 2005 – Major Japanese semiconductor chipmakers, including Hitachi Ltd. and Toshiba Corp., are planning to set up a joint firm for the production of next-generation semiconductor chips, Jiji Press learned Friday. Among other firms seen participating in the project are NEC Electronics Corp. and Renesas Technology Corp.

The companies aim to share the burden of the huge capital investment necessary to build a next-generation chip plant and reinforce research and development activities to compete against such foreign rivals as Samsung Electronics Co. of South Korea.

Under the plan, the Japanese chipmakers will set up a joint firm before the end of this year to study the feasibility of the joint production of semiconductor chips of 45nm linewidth, according to sources familiar with the matter.

The chipmakers will then invest an estimated 300 billion yen to build a joint production facility, they said. The money will be put up by the companies participating in the project. But the firms will also consider procuring finance from investment funds, according to the sources.

Several years ago, Japanese chipmakers considered setting up a joint firm for the production of semiconductor chips with a line width of 90nm. But the plan proved still-born as the companies chose to build their own facilities. An official at the Ministry of Economy, Trade and Industry noted that Japanese chipmakers need to join hands in the production of next-generation chips in order to remain competitive in the industry at a time when South Korean and Taiwanese chipmakers are quickly expanding their presence in the global market.