Japan's Matsushita and Renesas Technology plan to jointly develop process technology for 32-nanometre system chips, the most-advanced semiconductor, a report said Thursday. Electronics giant Matsushita Electric Industrial Co., best known for its Panasonic brand, and Renesas Technology Corp. hope to sign an agreement of the by the end of the fiscal year, the business daily Nikkei reported, without clarifying sources.

The move will split major Japanese chipmakers into two camps as Toshiba, NEC and Fujitsu intend to enter into a similar alliance to help reduce development costs.

Through the deal, technicians of Matsushita and Renesas will work to devise ways to fabricate fine circuits so that they will be able to make chips smaller and more energy-efficient than conventional versions, it said.

Matsushita plans to use the chips in its flat-panel televisions and other high-performance home electronics, it said.