Sony Corp., Toshiba Corp. and NEC Electronics Corp. have agreed to extend their existing cooperation in the development of advanced microchips to production, the Mainichi Shimbun newspaper said on Monday.

The three Japanese electronics companies, which are co-developing system chips with circuitry width of 45 nanometres, have decided to start making the cutting-edge chips jointly by around 2010, the daily said.

All three firms denied the report.

"We have no intention of joint production," a Sony spokesman said. "We make products ourselves, and if our capacity is not sufficient, we can turn to outside suppliers."

Toshiba and NEC Electronics are looking into the feasibility of joint production of 45-nanometre chips in line with their announcement in November, but Sony is not part of the talks, spokesmen at Toshiba and NEC Electronics said. A nanometre is one billionth of a metre.

Sony, Toshiba and NEC Electronics, the chip unit of NEC Corp., announced last month they would co-develop the advanced microchips, sharing hefty costs and pooling technological expertise.

Finer circuitry decreases the size of a chip and enables data to be processed faster. It also cuts production costs per chip.

But costs for development and production facilities have increased as technology moves to ever-more intricate circuitry, making it difficult for chip makers, except for a few heavyweights with deep pockets such as Intel Corp., to go it alone.

Shares in Sony were down 1.3 percent at 5,290 yen by midday, while Toshiba, the world's fourth-largest chip maker, gained 0.6 percent to 663 yen. NEC Electronics was down 0.9 percent at 4,410 yen.

The Tokyo stock market's electrical machinery index was up 0.34 percent.