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The three companies will work together to usher an industry migration from the current 12in (300mm) silicon wafers to 18in (450mm), which Intel claims will yield more than double the number of chips.

The companies are hoping the first pilot line will be tested and operational by 2012.

"Increasing cost due to the complexity of advanced

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technology is a concern for the future," says Mark Liu, TSMC's senior vice president of Advanced Technology Business.

"Intel, Samsung, and TSMC believe the transition to 450mm wafers is a potential solution to maintain a reasonable cost structure for the industry."

The size of a wafer, the silvery disks from which tiny chips are diced, is critical to make production more efficient. A new generation of larger wafers typically comes out each decade or so.

The group is planning to cooperate with the whole semiconductor industry in order to establish common standards.

However, a factory designed to make chips on 18in wafers could cost $10 billion or more to build, nearly triple the price of a current 12in wafer factory.

Only the biggest companies, like Intel, Samsung and TSMC, have the resources to be the first adopters of the new technology, with smaller manufacturers liable to left out in the cold.