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IBM Unveils Another Deal With Siemens : Technology: The American and German companies will team up to produce a powerful computer chip.

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From Reuters

International Business Machines Corp. and German giant Siemens AG said Thursday that they would jointly produce a powerful 16-megabit computer chip at a plant near Paris.

IBM has shown itself increasingly willing to form alliances with other large computer companies to share costs and compete in the rapidly changing market. On Wednesday, IBM announced an agreement to join with longtime archrival Apple Computer Inc. to develop new computers and programs.

Siemens and IBM already have teamed up in the race to develop the even more powerful next-generation 64-megabit chips with a goal of introducing them into commercial production by the mid-1990s.

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Under the latest agreement, which will require a joint investment of several hundred million dollars, the two companies will begin producing 16-megabit chips later this year at an IBM plant near Paris.

IBM will keep chips for use in its own machines, while Siemens will use them in specialized products.

Semiconductors, the heart of computers and other electronic devices, have progressively gotten smaller and more powerful, allowing desktop computers to perform tasks that formerly could be done only by large mainframes.

The 16-megabit dynamic random-access memory chips that IBM and Siemens plan to produce can hold four times the information of today’s advanced 4-megabit DRAMs.

The 64-megabit DRAMs, the Holy Grail being pursued by a dozen companies worldwide, will increase chip capacity by another factor of four, greatly boosting the power of small computers and the performance of other electronic devices.

IBM and Siemens will employ 600 specialists from both companies for the 16-megabit production, using the latest chip manufacturing equipment operating on eight-inch wafers.

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“Through this agreement IBM and Siemens will implement the latest semiconductor manufacturing technology in Europe,” Siemens President Karlheinz Kaske said in a statement. “This is a further step to strengthen an independent European electronics industry.”

“This agreement helps achieve a more global balance by establishing 16-million-bit manufacturing technology in Europe on a very aggressive schedule,” said Jack Kuehler, president of IBM. “It furthers IBM’s technology strategy that seeks to strengthen both U.S. and European technology sectors.”

IBM and Siemens, which have both been working on 16-million-bit technology for some time, decided to manufacture the chips jointly not only to spread out the cost but also to bring the product to the market before the Japanese.

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