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Taiwanese chipmakers pool research

Twelve companies are combining silicon know-how in a bid to boost the country's chip competitiveness in a cutthroat global market.

Twelve Taiwanese companies are pooling silicon know-how in a bid to boost the country's chip competitiveness in a cutthroat global market.

The group of companies, tentatively named the Silicon Intellectual Property (SIP) Qualification Alliance, is made up of Taiwan's largest semiconductor players, including United Microelectronics Corp. and Taiwan Semiconductor Manufacturing Co.

The project is supported by Taiwan's Industrial Technology Research Institute's System-on-Chip Development Center.

Chen Wen Feng, an institute manager, told CNETAsia that the project will help prevent labs from covering the same research that other labs in Taiwan are covering.

Only useful, market-driven information will be shared--there is no need to share everything, Chen said. For now, research costs will be borne by individual members of the alliance, but he did not rule out some sort of cost-sharing in the future.

He said rules were still forming to ensure that individual members, who are also business rivals, can retain unique technology that gives them a competitive edge.

Besides improving the quality of chip design, the project aims to lower the cost of purchasing technology from other companies, according to a report in The China Post.

The announcement comes amid trying times for the semiconductor industry. Global demand for chips continues to be soft while the cost of production remains high.

According to a recent report by the U.S.-based Semiconductor Industry Association, worldwide chip sales amounted to $11.8 billion in February, a 3.3 percent dip from the previous month.

Adding to the slowing demand, the cost of making chips continues to soar. The price tag for building a plant runs between $2 billion and $3 billion and is steadily rising.

This cost increase is forcing companies to outsource work or to partner with other chip companies on research, development and manufacturing.

For example, Philips Semiconductor has entered an alliance with Motorola and European chipmaker STMicroelectronics that lets the companies share the costs of developing manufacturing technology for 90-nanometer chips.

CNETAsia's Winston Chai reported from Singapore.'s Michael Kanellos contributed to this report from San Francisco.