The project will focus on accelerating the move to produce 65 nanometer (nm) chips and later 45 nm semiconductors.

Under the agreement, the three companies will jointly develop a common foundry process to produce 65 nm chips in a new laboratory facility in East Fishkill, New York, called the Advanced Semiconductor Technology Center.

About 200 engineers from the three companies will work on the project.

Chartered chief executive Chia Song Hwee said chip companies are now under pressure to deliver sophisticated systems in silicon faster than ever before and get it right the first time.

'The joint development model is critical to keeping fabless and fab-lite companies at the leading edge of process technologies,' he said.

Nanotechnology is a manufacturing technology aimed at making products smaller, lighter, stronger, cleaner, less expensive and more precise by manipulating materials at the atomic level.

A nanometer is a billionth of a meter, or roughly one-hundred-thousandth the diameter of a human hair.