Toshiba, NEC Team Up for Chip Venture

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Japanese electronics makers Toshiba Corp. and NEC Electronics Corp. will jointly develop technology to produce next-generation semiconductors that are smaller, faster, more efficient and less costly, the two companies announced Wednesday.

The new chips will have circuit widths as narrow as 45 nanometers, allowing electronics makers to also shrink the size of their products, a joint statement said. One nanometer is one-billionth of a meter.

The companies said joint development would allow them to share the hefty costs associated with creating new chip technology and speed up the development process, adding they had started discussing a comprehensive alliance in their semiconductor operations.

Chipmakers around the world are stepping up efforts to improve their production technology amid stiff competition in the global semiconductor market.

Matsushita Electric Industrial Co., another Japanese consumer electronics maker, said last month it started making 65-nanometer chips for use in digital consumer gadgets.

Wednesday's deal came after NEC Electronics warned in late October it would fall deep into the red this fiscal year after falling sales and prices for a range of its chip products.

Shares in the company closed 5.5 percent higher Wednesday on the Tokyo Stock Exchange after the Nihon Keizai Shimbun carried a report of the companies' agreement ahead of the official announcement.