Toshiba and NEC Electronics hope to boost the miniaturisation of consumer electronics products by partnering to develop advanced chip manufacturing technologies with features as small as 32 nanometres.

The companies will develop technologies for fabricating system large scale integrated circuit (LSI) chips, which typically bring together functions previously handled by several individual chips, and their development is vital to the continuing miniaturisation of MP3 players, mobile phones and other electronics gear.

The agreement extends the collaboration between Toshiba and NEC Electronics, which have worked together since February last year on a 45-nanometre production process. The figure refers to the smallest features etched onto the surface of a silicon chip, and one nanometre is equal to about a billionth of a meter.

Each advance in chip manufacturing allows either smaller chips to be made, or more components to be squeezed on to each chip. The result is usually more powerful chips that consume less electricity - both key features for portable electronics devices.

The 45-nanometre work, taking place at Toshiba's Advanced Microelectronics Center in Yokohama, is approaching its end, said Sophie Yamamoto, a spokeswoman for NEC Electronics. The 45-nanometre project also involved Sony under a separate agreement reached with Toshiba in 2004. Sony will not take part in the 32-nanometre development because of efforts to cut its costs.

Toshiba and NEC Electronics also continue to discuss the possibility of joint manufacturing, they said. Chip production plants cost billions of dollars to build, and the price is rising as more advanced technologies are introduced. Several other chip makers have already agreed to joint manufacturing as a way to cut costs and reduce risks.