Toshiba teams with IBM-led group on 32nm chip research

With Intel putting on the pressure with its 45nm production, rivals looking to keep up

Toshiba Corp. today announced plans to expand its work with an IBM-led research group working on developing 32-nanometer technology.

Toshiba, which has been working with the group since December 2005 on 32nm process technologies, today announced that it's extending the scope of its participation to include 32nm bulk CMOS process technology.

The seven-member research alliance also includes Advanced Micro Devices Inc., Samsung, Chartered Semiconductor Manufacturing and Infineon Technologies AG.

Toshiba's announcement is just the latest of several recent industrywide announcements about nanometer technology.

Late in October, Intel Corp. opened a new $3 billion manufacturing facility in Chandler, Ariz., kicking off mass production of its new 45nm Penryn microprocessors.

Analysts said now that 45nm technology is in production, 32nm microprocessors should be only about two years away. And Intel's rivals obviously are hot to get working on it.

Dan Olds, an analyst at Gabriel Consulting Group Inc., said Intel definitely has put the squeeze on other chip manufacturers to up their pace to smaller and smaller nanometer production.

"Intel's 45nm move was fully expected. But it's true that the pressure is on everyone else, not necessarily to be the first to 32, but to at least be close," said Olds. "It costs a lot of dough to be on the cutting edge, and it's risky. You can screw up your fast chips in a whole bunch of ways and it can be hugely expensive to fix them -- not to mention the time lost … The best answer is to gang up with other bright guys and get the technology right together."

Olds also noted that while chip prices have been dropping, the cost of research and development have not. That means collaboration among vendors is a smarter move than ever these days.

"The increased complexity is making the R&D, people and equipment to design and produce the new chips much more expensive," added Olds. "Even if you do everything right and get your 32nm out on time, the profits you make per chip are probably less than they were on the last jump. So the smart guys will do stuff like partnering to reduce their upfront development costs."

Last month, Toshiba and NEC Electronics Corp. announced they were working together to jointly develop 32nm chips. The companies had been working together to build 45nm process technology since February 2006, and then extended their partnership to the 32nm generation.

However, earlier in November, analysts applauded Sony Corp.'s decision to pull out of plans to join IBM and Toshiba in a 32nm chip research effort. Analysts called the withdrawal a smart move, saying the research is a pricey venture, and backing away would allow Sony to divert that research money directly to its ailing bottom line.

Copyright © 2007 IDG Communications, Inc.

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