Chip makers eye Intel

Ten major semiconductor chip makers will reportedly join forces to develop a new high-performance microprocessor in order to do compete in the microprocessor market with Intel (INTC).

The list of chip makers includes Fujitsu, Toshiba, and Matsushita Electric Industrial, according to a report in the Nihon Keizai Shimbun, Japan's largest business daily.

Specifications for the new chip have not yet been set, according to the report. The alliance hopes to have the specifications ready by the end of 1997 in order to have the new microprocessor on the market by as soon as 1998.

The new chip will integrate a microprocessor with memory on a single chip and will provide efficient parallel processing, according to the report. Members of the alliance will design and manufacture processors for use in personal computers and multimedia equipment.

"There's no doubt that the coalition can execute, but getting the market to adopt [a new processor] is a completely different issue," cautions Dean McCarron, principal analyst at Mercury Research.

McCarron remembered a similar initiative by Japanese chip makers in the late 1980s which produced a chip and an operating system that aimed to supplant Microsoft's DOS and Intel's processors. The initiative failed to make any impact.

The inclusion of semiconductor makers outside of Japan such as Texas Instruments and SGS Thompson may be a result of that earlier failure to market the chips in the North American market, according to McCarron.

Other members include Texas Instruments Japan, NEC, and Hitachi.