NEC, Toshiba Tie Up on Chips-Nikkei

Japan's NEC Corp and Toshiba Corp have agreed to jointly develop next-generation memory chips that reduce power consumption in a bid to hit back at overseas rivals, the Nihon Keizai Shimbun said on Sunday.

The deal between Japan's top two chipmakers will involve the development of Magnetic Random Access Memory (MRAM) chips that substantially increase the length of time notebook personal computers and mobile phones can operate on a single battery charge, the business newspaper said.

Officials for NEC and Toshiba were not immediately available for comment.

Annual demand for MRAMs as a replacement for current commodity memory chips is expected to reach 1.0 trillion yen ($8.33 billion) by 2007, Nihon Keizai said.

NEC and Toshiba have already set up a joint task force with 20 engineers from each firm, the paper said, adding that the companies aim to establish a prototype production line at NEC's plant in Sagamihara, Kanagawa prefecture near Tokyo, by year end.

The two firms plan to invest more than 10 billion yen by spring 2005 in development, Nihon Keizai said.

The deal marks the start of a counter-offensive by Japanese chipmakers against overseas rivals, industry observers said.

A number of major overseas chipmakers are also working on MRAMs. U.S. semiconductor maker Motorola Inc has already developed a prototype lower-capacity MRAM, and International Business Machine Corp and Infineon Technologies AG of Germany have begun joint development, Nihon Keizai said.

News source: Reuters - NEC, Toshiba Tie Up on Chips-Nikkei

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