NEC is expected to establish a joint venture in China with Huahong Microelectronics as part of a $1 billion national microchip project, according to the Nihon Keizai Shimbun, Japan's largest business daily.
Huahong Microelectronics is closely linked with the Chinese Ministry of Electronics, according to the report.
NEC will provide the project with technology for advanced chip manufacturing.
Dubbed "Project 909," it is China's largest national semiconductor project and aims to establish production technologies to meet the demand for chips in consumer electronics equipment, the report said.
The project is targeting 8-inch silicon wafers based on 0.35-micron production technology. Today, most microprocessors use 0.35-micron production technology.
The venture will start up in 1998 with a monthly output capacity of about 20,000 wafers, the newspaper report said.