Chip makers to develop new technology

Facing rising product-development costs, six of the world's largest semiconductor manufacturers said they would join forces to develop new technology for the most common type of memory chip used inside personal computers. The six are Intel Corp.

Facing rising product-development costs, six of the world's largest semiconductor manufacturers said they would join forces to develop new technology for the most common type of memory chip used inside personal computers.

The six are Intel Corp. (Nasdaq: INTC) and Micron Technology Inc. (NYSE: MU) of the U.S.; NEC Corp. of Japan; Samsung Electronics Co. and Hyundai Electronics Industries Co. of South Korea; and Infineon Technologies AG, a unit of Germany's Siemens AG. The group -- excluding Intel, which mainly makes microprocessors -- accounts for about 70 percent of the global market for dynamic random access memory, or DRAM. That market reached US$21 billion last year, according to research firm Dataquest Inc.

"We have to pour lots of money into developing next-generation DRAM," said Simon Hong, the market communications manager in Seoul for Hyundai MicroElectronics, the semiconductor unit of Hyundai Electronics. The unusually broad alliance should be "more cost effective" than going it alone, he said.

Future of chipsets
A statement by the six companies vaguely referred to a goal of developing "high-performance advanced DRAM technology" that would be in the marketplace in 2003. The group said it would provide information to facilitate the development of related PC components such as a chipset, which acts as an intermediary between DRAM and the central processing unit, or CPU. The market for CPUs, which do the computational heavy lifting inside a PC, is about 80 percent controlled by Intel under its brands such as "Pentium" and "Celeron." Consumer interest for high-performance PCs that provide advanced multimedia and graphics is pushing Intel to develop higher-speed CPUs that require more powerful yet affordable DRAM chips.

The announcement of the alliance follows uncertainties surrounding Intel's much ballyhooed chipsets, based on technology developed by Rambus Inc., that were supposed to help create a jump in PC performance. "The entire DRAM and PC industry has suffered from delays and confusion about Rambus," said Don Floyd, regional semiconductor-industry analyst at Credit Lyonnais Securities in Taipei.

By working on technology that will be in the market a full three years from now, the alliance is trying to look beyond the current battle lines of industry competition.

Each member of the alliance will commit a design team to the project, which will be overseen by a senior technology committee, said a Samsung official, adding that different roles haven't been set. No budget figures were available.

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