Toshiba Considers Semiconductor Partnership

Company considering alliance with NEC and Fujitsu to develop and produce next-generation, ultra-small consumer electronics chips.

TOKYO (AP) - Toshiba Corp. said Wednesday it is considering an alliance with other Japanese semiconductor makers, including NEC and Fujitsu, to develop and produce next-generation, ultra-small consumer electronics chips.

But Toshiba spokeswoman Kaori Hiraki denied a newspaper report that the company had already reached agreement with NEC Electronics Corp. and Fujitsu Ltd. on the joint production of new chips smaller than 32 nanometers—or 32 billionths of a meter.

Fujitsu and NEC Electronics also denied that an agreement had been reached.

The Nikkei business newspaper reported Wednesday that the three companies have reached an agreement to jointly develop large-scale integrated, or LSI, chips for use in flat-panel televisions and other digital electronic appliances.

''We are still studying various possibilities,'' Hiraki of Toshiba said. ''We have not decided anything.''

Fujitsu also acknowledged it is in negotiations with various companies, including Toshiba and NEC Electronics, ''as part of a global trend involving the 32-nanometer chips.''

''What to do with the next generation chip is actually a major interest across the industry,'' Fujitsu spokesman Hiroshi Tsuda said. He denied any accord had been reached.

NEC Electronics likewise said it is considering steps on the advanced chips and denied the reported agreement.

Japanese chip makers remain at the forefront in the development of ultra-fine chip technology, but they have been losing out to foreign rivals such as Intel Corp. and Samsung Electronics Co.

An alliance would help the companies save huge development and production costs and stay competitive globally.

Toshiba has formed a separate similar joint project with IBM Corp. and Sony Corp., while it has already partners with NEC Electronics to develop 45-nanometer processing technology.

The Nikkei said the three companies are expected to form a team of engineers later this year to develop the new chip, aiming to begin mass production in about two years.

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