Toshiba said on Tuesday it would join a group led by IBM to develop system chips using 32nm circuitry, as chip makers increasingly team up to cut development costs.

The alliance also comprises AMD, Samsung Electronics, Chartered Semiconductor Manufacturing , Infineon Technologies AG and Freescale Semiconductor Inc.

Since December 2005, IBM and Toshiba have collaborated on advanced research related to semiconductor process technologies at the 32nm technology generation and beyond at the research facilities in Yorktown and Albany, New York.

Toshiba previously signed an agreement with NEC Electronics to jointly work on 32-nanometre technology. That alliance would focus on ways to mass-produce the chips, Toshiba said.

The seven companies have agreed to work through 2010 to design, develop and produce chips using tiny circuitry.

"This agreement caps a year of extraordinary momentum for IBM and its semiconductor Alliance Partners," said Gary Patton, vice president for IBM's Semiconductor Research and Development Center.

"This is a promising collaboration," said Mr. Shozo Saito, Corporate Senior Vice President of Toshiba Corporation and President & CEO of Toshiba's Semiconductor Company. "In addition to continuing the successful collaboration on fundamental advanced research, Toshiba will jointly develop the state-of-the-art 32nm bulk CMOS process integration technology, as a member of the world-class seven-company IBM Alliance."

Using smaller circuit sizes helps boost chip makers' productivity by making smaller chips more powerful, but the move to smaller sizes is becoming too difficult and expensive for a single manufacturer to undergo alone.