JAN. 9–UOZU, Japan–Matsushita Electric Industrial Co. Ltd., best known for its Panasonic brand, is investing $1.2 billion to build a new semiconductor facility aimed at making chips for DVDs, digital TVs, mobile communications equipment, SD memory cards and network-related equipment.

Announcement of the new facility comes one day after Panasonic AVC Networks President Fumio Ohtsubo showed off a variety of networking technologies at the Consumer Electronics Show in Las Vegas, plugging the company’s vision of a world populated with networked technology.

Officials say that construction of the facility is set to begin in May of this year with production aimed for the end of 2005. The new facility will be located at its Uozu Plant in the Toyama Prefecture of Japan, the company said.

The facility will be equipped with a 90-nanometer production process for 300mm wafers, with plans to eventually upgrade the production processes to 65-nanometers. The latter number refers to the smallest gap or feature that can be created on a chip. While most commercial semiconductor plants currently use advanced 90-nanometer processing, by upgrading to 65-nanometer processes the company will be able to make the chips physically smaller. This allows more chips to be made from each wafer, increasing production efficiency. Additionally, smaller chips meet demand for smaller electronic products.

The facility will eventually have a capacity of 7,500 wafers a month, Matsushita said.

Investment in the expanded production of advanced system LSI (large scale integrated circuit) chips meets with its goal of targeting the digital home electronics market, the company said.