The alliance, which also includes Infineon Technology and Freescale Semiconductor, is geared to help the chipmakers cut costs as they race to keep pace with Moore’s Law, the observation by Intel co-founder Gordon Moore that the complexity of chips doubles about every 18 months.

By moving to smaller chip geometries, chipmakers increase productivity. However, they face increasing technical difficulties in manufacturing chips at an ever-shrinking scale, while serving their high-volume customers.

In the 35-nm node, the chipmakers expect significant challenges both in materials and in device structures.

The group said they would work through 2010 to design, develop and manufacture 35-nm chips, which will be used in various products, including PCs and mobile devices.

Notably absent from the alliance was the world’s biggest chipmaker Intel.