Samsung, Intel, TSMC to work on next-gen chip format

SEOUL/TAIPEI (Reuters) - Samsung Electronics (005930.KS: Quote, Profile, Research, Stock Buzz), the world's top maker of memory chips, on Tuesday said it would cooperate with top rivals Intel (INTC.O: Quote, Profile, Research, Stock Buzz) and TSMC (2330.TW: Quote, Profile, Research, Stock Buzz) to develop next-generation bigger silicon wafers to boost efficiency in chip manufacturing.

Samsung said in a filing that it would work with U.S.-based Intel Corp, the world's top maker of semiconductors, and Taiwan's TSMC (TSM.N: Quote, Profile, Research, Stock Buzz), the world's largest contract chip maker, to help migration of manufacturing standards from the current 12-inch (300 mm) silicon wafers to 18-inch (450 mm) discs that would yield more than double the number of chips.

The South Korean company said the cooperation plan called for a first pilot line to be operable by 2012.

The world's largest chip makers have been exploring the move to pizza-sized silicon wafers to help them grab market share as demand surges for gadgets such as Apple Inc's (AAPL.O: Quote, Profile, Research, Stock Buzz) iPod.

"Increasing cost due to the complexity of advanced technology is a concern for the future," Mark Liu, TSMC's senior vice president of Advanced Technology Business, said in a statement.

"Intel, Samsung, and TSMC believe the transition to 450mm wafers is a potential solution to maintain a reasonable cost structure for the industry."

The size of a wafer, the silvery disks from which tiny chips are diced, is critical to make production more efficient. A new generation of larger wafers typically comes out each decade or so.

The group is planning to cooperate with the whole semiconductor industry in order to establish common standards through the International Sematech Manufacturing Initiative (ISMI) consortium.

Still, some analysts say cost is a major hurdle and the industry -- from semiconductor makers to the companies that make their equipment -- needs to agree on how to proceed.