The cost of the fab and production targets will be decided by the middle of next year, according to the report. The companies are expected to agree on issues such as ownership and royalties for the technology by mid-January, according to the report.

Rumors about the venture have been circulating for years. But several leading Japanese semiconductor manufacturers denied a report in September about the foundry fab venture.

The idea of a jointly-owned Japanese foundry, initially proposed at the beginning of the decade, appeared to be once again losing steam. The Nikkei Shimbun report stated Hitachi, Toshiba, Renesas, NEC Electronics, and Matsushita as finalizing a plan to launch operations in 2007 with a joint investment of between $2 billion and $3 billion.

Then, five Japanese semiconductor manufacturers last month reportedly reached a basic agreement to establish the joint fab. The companies once again included Hitachi, Matsushita, NEC Electronics, Renesas Technology and Toshiba.

It is unclear how Matsushita and NEC fit in the fab equation. In a separate effort to reverse its misfortunes, Japan’s NEC Corp. said it is seeking business partners for its loss-ridden cellular phone and semiconductor units, according to a report from Reuters this week.

For its semiconductor unit, NEC is looking to reach an agreement with undisclosed partners on joint production of advanced chips in the next 18 months, according to the report.

To complicate matters, NEC Electronics and Toshiba last month announced that the two companies would share the development of 45-nm CMOS logic manufacturing processes. In addition, starting with this joint development, the two companies have begun discussions on the possibility of a comprehensive alliance that would range from design and product development through to manufacturing.

In October Kaoru Tosaka, president and chief executive of NEC Electronics, stepped down amid mounting losses for the semiconductor and electronics giant.

Overall, Japan is seeking to regain lost ground in semiconductors. After sizzling growth amid a massive fab expansion effort in 2003 and 2004, Japan’s leading semiconductor makers slipped back into the abyss in 2005, following top-level executive changes, mounting losses, capital spending cuts and disappointing product demand .

By: DocMemory
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