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Japanese firms confirm talks to create chip powerhouse

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Hitachi, Toshiba and Renesas have confirmed that they're considering creating a company to handle their shared chip fabrication needs. Meanwhile, various media reports say the three companies are much farther along with their plans than they let on.

The triumvirate refused to spare more than two sentences on their ambitions in a statement issued today.

"Hitachi, Toshiba and Renesas today announced 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 statement served a weak counter to reports from Bloomberg and the often over-eager Nikkei Shimbun that claim the companies have already committed to setting up a shared foundry. Goals for the foundry would be set by the middle of next year with production starting in 2007, according to the reports. NEC and Matsushita are also said to be involved in the deal.

A Japanese chip house with such impressive backing would aid competition against the likes of Taiwan's TSMC, Intel in the US and a growing Chinese chip presence. The costs of chip fabrication continue to rise, making it difficult for individual companies to fund disparate efforts. Creating a joint foundry would help stretch research and development funds and let the Japanese companies go up against rivals more effectively.

This type of arrangement has been rumored for a long time.

Reports suggest that the companies would work to create 45-nanometer process technology ahead of rivals. ®

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