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NEC Corp. and Toshiba Corp. have begun developing next-generation memory chips that promise to slash power consumption in personal computers and other portable electronic devices.

The two companies said they are seeking to develop technologies to mass-produce Magnetic Random Access Memory chips by 2005 to replace the industry’s current mainstay, Dynamic Random Access Memory chips.

The first tieup between the country’s largest chip producers on developing the key technology heralds an attempt by the sector to regain ground it conceded to U.S. and South Korean firms in producing the current standard in memory chips.

The Japanese companies said they have already sent 20 scientists each to begin joint development of the chips at NEC’s plant in Sagamihara, Kanagawa Prefecture.

They did not say, however, whether they would also join hands in mass-producing and selling the new chips.

Industry observers say MRAM chips can greatly lower power consumption compared with conventional DRAM chips, enabling notebook computers and cell phones to run longer on a single battery charge.

If the MRAM chips can be mass-produced, annual demand could reach several trillion yen, the observers added.

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