Thu, Jan 19, 2006 - Page 11 News List

Three Japanese firms preparing to take on TSMC

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Hitachi Ltd, Toshiba Corp and Renesas Technology Corp will decide in six months whether to build Japan's first factory to make customized chips to compete against Taiwan Semiconductor Manufacturing Co (台積電) and others.

The three Tokyo-based companies said in a statement yesterday that they will create a holding company this month to plan the venture. The factory would make computer chips in the 65-nanometer-or-less category, the smallest commercially produced, the statement said.

Hirokazu Hashimoto, a former vice president at NEC Electronics Corp, Japan's No. 3 chipmaker, will helm the venture, it said.

Japanese chipmakers may join forces to meet costs for making specialized semiconductors used in electronics from mobile phones to DVD players. Taiwan Semiconductor, the world's largest supplier of made-to-order chips, makes custom chips for Microsoft Corp's Xbox 360 game console and Nokia Oyj's mobile phones.

The three companies will invest ?200 million (US$1.7 million) in the planning company by March, with Hitachi providing half of the funding and Toshiba supplying 33 percent, according to the statement. The venture, named Advanced Process Semiconductor Foundry Planning Co, will have 10 employees, it said.

Hitachi president Etsuhiko Shoyama in September said the company was in talks with Toshiba, Renesas, NEC Electronics Corp and Matsushita Electric Industrial Co to create a foundry. Renesas is owned by Hitachi and Mitsubishi Electric Corp.

Hitachi, Toshiba and Renesas are expected to spend ?100 billion on the foundry to begin production by 2007, the Nihon Keizai newspaper reported last month.

Japanese chipmakers such as Hitachi, Toshiba, Mitsubishi Electric and NEC Corp have seen their once-dominant positions eroded in the more than US$200 billion semiconductor industry.

Since taking the market for dynamic random access memory, the main chip used in computers, in the late 1970s from US companies such as Intel Corp and IBM Corp, Japanese companies saw their share eroded by South Korea's Samsung Electronics Co and Taiwanese companies.

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