14 DAY TRIAL // Three major Japan chip makers investigating a joint-foundry venture for taking by storm the chipmaking industry
Hitachi, Toshiba Corporation and Renesas Technology Corp. announced on Wednesday December 28, 2005 that they have initiated a joint study on the feasibility of an independent semiconductor foundry business offering advanced fabrication processes to which each of the companies could outsource fabrication.
The joint study will consider establishing of a planning company, the outline of which is not yet decided.
The Nihon Keizai Shimbun business daily reported that Hitachi, Toshiba Corp. and Renesas Technology Corp. would invest up to 100 billion yen ($851.6 million) on a new manufacturing line in Japan, with aims of starting mass production of system chips in 2007.
This collaboration is aimed at competing with leaders in the industry like Intel and Samsung. "The original point of this was for Japanese makers to get together and share the burden of a big investment, but the scale of the venture seems to have dwindled down to just 100 billion yen," said Takeo Miyamoto, analyst at CLSA Asia-Pacific Markets. "There would be doubts about whether a venture of this kind would really be able to compete with Samsung and Intel."
The foundry will begin operations in 2007 and offer advanced 65 nanometer manufacturing to all three companies, the Nihon Keizai Shimbun said in its Wednesday morning edition. A nanometer (nm) is a thousandth of a millimeter, and chip production technology is measured by the size of the smallest feature it can support. At present, most advanced chips are made on 90nm production lines, although Intel Corp. has already introduced technology that works down to 65nm.
Renesas, Hitachi and Toshiba plan to develop small fast chips that use less power and will enable the further shrinking of electronics items. They would come together next month to study the feasibility of the entire concept and reports in the media suggest that a production line could be developed at a Toshiba or Renesas factory. In 2004 Toshiba and Sony Corp.agreed to work together on developing technology that can produce chips whose smallest features are 45 nanometers in size. In November this year Toshiba announced a similar agreement with NEC Electronics Corp. At present both represent different projects but the three could join in a single initiative.
Japan dominated the global semiconductor market in the late 1980s, with NEC, Toshiba and Hitachi the world's three largest chip makers in terms of sales. But last year, not one was ranked in the top three.