Matsushita and Renesas to jointly develop chips: report

TOKYO (Reuters) - Panasonic brand maker Matsushita Electric Industrial Co Ltd (6752.T) and microchip maker Renesas Technology have agreed to tie up in developing next generation semiconductors, the Nikkan Kogyo newspaper reported on Thursday.

It said that unlisted Renesas, a joint venture between Hitachi Ltd (6501.T) and Mitsubishi Electric Corp (6503.T) and Matsushita would also embark on joint production of the 32-nanometer chips, it said.

Chip makers are racing to move to tinier circuit sizes to cut production cost per chip function and enable powerful electronics that run for hours without killing the battery. But the shift also forces changes in fundamental materials and processes and exposes chip makers to huge initial costs.

Rival Japanese chip makers Toshiba Corp. (6502.T) and NEC Electronics Corp. (6723.T) said in November they would jointly develop 32-nanometer chips.

Samsung Electronics Co. (005930.KS), IBM (IBM.N), Chartered Semiconductor Manufacturing Ltd. (CSMF.SI), Infineon Technologies (IFXGn.DE), STMicroelectronics (STM.PA) and Freescale Semiconductor have said they would work through 2010 to develop and produce 32-nanometer chips. A nanometer is a billionth of a meter.

(Reporting by Edwina Gibbs)