P. M. BRIEFING : $1-Billion U.S. Co-Op Venture to Make Computer Chips Folds

A high-flying U.S. venture to regain control of the vital computer chip industry from Japanese dominance folded today because it failed to attract investors.

Santa Clara-based U.S. Memories Inc. was hailed as a $1-billion cooperative venture by American companies, but in its seven brief months of life it failed to make a single computer chip or earn a single dollar.

“I am extremely disappointed by this turn of events,” Sanford L. Kane, president of U.S. Memories, said at a news conference. “What happens today does not bode well for an industry that has made a technical decision rather than a tactical one.”

Kane told the crowded news conference that the joint venture will be “terminated,” largely because of a lack of support from the electronics industry.

The venture had not found a new investor since its formation last June by seven big-name backers--International Business Machines Corp., Digital Equipment Corp., Hewlett-Packard Co., Intel Corp., Advanced Micro Devices Inc., National Semiconductor Corp. and LSI Logic, according to published reports.