TOKYO, JAPAN (December 18, 1998) -- Matsushita Electric Industrial Co., Ltd. (MEI), Matsushita Electronics Corporation (MEC), a wholly owned subsidiary of MEI, and Mitsubishi Electric Corporation (MELCO) today announced their agreements to cooperate on the development of next-generation system LSIs integrating high-speed logic technology with embedded DRAM (eDRAM) technology.

The companies also agreed to study the feasibility of a wide range of long-term projects such as joint development of one-gigabit eDRAM (0.13-0.10 micron) process technology, joint production of system LSIs, and joint development to improve design environments by sharing semiconductor intellectual properties such as design cell libraries. The companies plan to work closely together, even exchanging development resources in the following two phases:

• Matsushita and Mitsubishi signed a joint development agreement for the 0.15 micron eDRAM process.
• Under the agreement, both companies will develop competitive technologies by sharing their respective strengths.
• Under the agreement, the companies will accelerate technology development for launching advanced products targeting year 2000.

• Both companies reached an agreement to study the feasibility of joint development of key technologies for an ultra-fine eDRAM process (less than 0.13 micron) and a shortened development term by setting up a pilot line for manufacturing prototype chips.
• Both companies reached an agreement to study the feasibility of sharing semiconductor intellectual properties such as design cell libraries.

The digital equipment market is expanding rapidly. The increased demands of high performance products lead to a demand for advanced system LSIs with embedded memory cells and logic cells. The current semiconductor industry, however, faces several structural problems such as increased development costs for cutting-edge process technologies and expanded capital investment for manufacturing lines. Reduced development costs and effective business management are becoming increasing important.

Under these circumstances, this agreement aims not only at reducing costs and shortening the development period, but also at pursuing ideal semiconductor business operations including the possibility of unified development and production with the prospects of long-term cooperation into the 21st century.

Established in Osaka, Japan in 1918, Matsushita Electric Industrial Co., Ltd. is one of the world's leading producers of electronic and electric products for consumer, business and industrial use. Consolidated annual sales for the fiscal year ended March 31, 1998 reached a record 7,890.7 billion yen (US $59.78 billion). Matsushita has more than 275,000 employees worldwide, with overseas operations that include over 220 companies in 46 countries. Matsushita's products are marketed worldwide under the Panasonic, Technics, Quasar and National brand names.

Matsushita Electronics Corporation was founded in 1952 and is a worldwide manufacturer of electronics components such as semiconductors, electron tubes and lighting products. The company's business is also includes research and development, and sales of components. Matsushita Electronics is a 100% subsidiary company of Matsushita Electric Industrial Co., Ltd. a leading manufactures of consumer and industrial of electronic/electric equipment.

Established in Tokyo, Japan in 1921, Mitsubishi Electric Corporation is a leading manufacturer of electrical and electronic equipment that develops and manufacturers reliable, high-quality products. Consolidated net sales for the fiscal year ended March 31, 1998 was 3,801.3 billion yen. Its areas of business include information processing and communications system, space equipment, semiconductors and electric devices, consumer products, building and automation equipment, industrial products, energy-related equipment and transportation systems.

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