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The smaller circuits will enable NEC to match other processor manufacturers in the race to produce ever smaller and cheaper chips. Intel, for instance, has a 65nm process while Samsung said that it will begin making 50nm circuits next year.

'We are focussing on chips that consume very little power,' said an NEC spokesman. 'This would make them suitable for mobile devices such as game machines, mobile phones or PDAs (personal digital assistants).'

NEC has also joined forces with Toshiba to begin development of 45nm circuits. Reuters notes that the costs of producing new chips are rising and companies acting alone have little chance of matching the resources that Intel has at its disposal.

The world's largest chip producer said last week that it will spend $3.5bn on a second 45nm plant in Israel to supplement the one currently being built in Arizona.