Siemens in dollars 1bn computer project

SIEMENS is joining IBM and Toshiba in a dollars 1bn programme to develop computer memories for the next century.

The devices, 256-megabit drams - dynamic access random memories - will hold 16 times as much data as memories available now. Each will be able to store the entire works of Shakespeare and Goethe as well as several major Japanese literary works.

The deal is the largest of its kind in the electronics sector involving partners from Europe, the US and Japan. It reflects the soaring costs of developing techniques needed to produce future generations of chips.

A 256-megabit dram requires pioneering technology known as X-ray lithography to fabricate chip features measuring a quarter of a millionth of a metre - 400 times narrower than a human hair. The techniques developed will also be important for other advanced components used in computers and telecommunications equipment.

Work on the new chip will begin immediately, drawing together scientists and engineers from all three partners at IBM's Advanced Semiconductor Technology Centre near New York. At its peak the project will involve 200 researchers around the world.

The deal underlines Siemens' deepening relationship with IBM. The companies are developing 16- megabit drams together and will produce them jointly at IBM's plant in Corbeil-Essones, outside Paris. European industrialists had hoped that Siemens might instead forge stronger links with other European chip firms such as Philips and SGS Thomson.

IBM and Siemens will also develop 64-megabit drams jointly, although the German company is interested in this primarily as a technology driver for other components and may not produce the memory chips.

Karlheinz Kaske, chairman of Siemens, said: 'We join together with Toshiba and IBM in the area of basic microelectronics technology. But we also remain strong competitors in products which derive from this technology.'

Toshiba noted that the deal built on an existing agreement it has with IBM to make flat computer displays for future generations of portable machines.

Byron Harding, of Dataquest, the industry analyst, said the market for drams would grow from dollars 7.5bn this year to around dollars 32bn by the end of the decade. The venture was likely to be the first of many between electronics firms.

AMD of the US and Fujitsu of Japan are to build a dollars 700m factory in Japan.