Report: NEC consolidating domestic chip work, sends work to Toshiba

November 30, 2007 – NEC is evaluating ways to consolidate its chipmaking base to save money, and like Sony expects to outsource production of next-generation chips to Toshiba, possibly by as early as 2009, according to the Nikkei daily.

NEC is currently prepping 55nm-based chips for mass production by the end of the current fiscal year, and has been working with Toshiba on 45nm chips. That codeveloped technology will also be used to push to 40nm by the end of fiscal 2008, technology for which NEC has already invested ~10B yen on (US $91M) for equipment, the paper notes. Production will be shifted to Toshiba’s plants in Oita Prefecture and elsewhere; talks about possible joint production are expected to lead to a decision sometime next year, the paper noted. Work on 32nm process technologies is expected to involve at least Toshiba and possibly other companies, including foundries.

To help curb capital spending costs, NEC plans to halve its domestic chipmaking sites to three by the end of the current fiscal year, combining its four frontend process firms and two backend/packaging subsidiaries, and nine frontend assembly lines to four. About 10,000 layoffs are expected, without the need for a voluntary retirement program, the paper notes.


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