Five Chip Makers to Work on Semiconductors

Toshiba Corp., NEC Corp. and three other Japanese chip makers will jointly develop technology that will shrink the size of semiconductors and boost efficiency, part of a move to compete against foreign rivals. With the aid of government money, Toshiba, NEC, Hitachi Ltd., Mitsubishi Electric Corp. and Fujitsu Ltd. will work together to shrink the size of the circuitry on semiconductors, packing more functions and information-handling capacity on smaller pieces of silicon wafers.

The Ministry of Economy, Trade and Industry and the five companies will choose one domestic factory to build labs and prototype-producing lines as early as May. The ministry will spend $238 million to buy equipment for the factory but has no intention of owning shares in the venture. Each chip maker is spending millions to shrink circuit features on chips, a process typically requiring huge investments in research and development.