TI, Hitachi Will Join to Develop New Chip
In a further thawing of the trade cold war between U.S. and Japanese computer chip makers, Texas Instruments and Hitachi said they will join forces to develop the next generation of memory chips.
The agreement, which calls for a joint technology effort on a chip called the 16-megabit DRAM, is yet another sign of the sometimes schizophrenic relationship that exists between U.S. chip makers and their Asian competitors. Dallas-based Texas Instruments and Hitachi, a Japanese electronics giant, have been on opposite sides in trade skirmishes in recent years.
Both companies said, however, that they shrugged off their past differences. They added that linking up on the next generation of memory chips will allow each to diffuse the risks and high costs associated with developing such sophisticated technology.
Memory chips, the subject of a bitter trade dispute between the United States and Japan dating back several years, are the building blocks of all electronic devices. But with each advancement in technology, development costs accelerate and product life spans decline. Analysts have estimated that it now costs as much as $200 million to develop each new generation of chips and $300 million to $500 million for the plants to manufacture them.
“The management of Hitachi has been very concerned about the short life cycle of new generations of semiconductors,” said Yashushi Sayama, a Hitachi vice president in New York. “Before, it was five years for each generation, now it is more like three years. We need to share the burden of development.”
Differing Approaches
Each company already has under way an initial design project for the 16-megabit chip. But the cost is now too great for one company by itself to “examine all the technology alternatives that are available,” Texas Instruments spokesman Stan Victor said.
In fact, TI and Hitachi have differing approaches to the complex task of fitting millions of circuits on the tiny chips; TI has used a trench approach--akin to building circuits underground--and Hitachi uses a stacking technique--rather like building skyscrapers on top of the delicate, microthin surface of the silicon chips.
Although there are many joint ventures between Japanese and American chip makers, most have involved technology swaps. For instance, Motorola has aligned with Japanese rival Toshiba. In that deal, the American chip maker is exchanging some of its microprocessor technology for Toshiba’s memory chip making expertise.
Hitachi may also have chosen an American partner for this venture as part of its efforts to improve its image in the United States. The company was bitterly denounced by some U.S. chip makers for its anti-competitive policies and has been found guilty of dumping chips on the U.S. market. In May, 1987, Hitachi and Texas Instruments reached a settlement in a patent infringement suit that the Dallas company brought against nine Asian chip makers.
The companies, in announcing the new venture in Tokyo, declined to release financial terms. The companies have not determined where the project will have its headquarters, TI’s Victor said.
