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will be shared, some companies have been reining in their investments, raising fears th

equipment needed to produce the new chips might be delayed for a year or more.

 ASML Holding  ASML.AE +0.21% NV, a maker of key 

machines used to define features on chips, recently sa

it had "paused" development of gear designed to work

 with the larger wafers. Intel Corp. INTC +0.12% , the

largest chip manufacturer by volume, said it has slowe

some payments to the Netherlands-based company 

under a deal to help develop the technology.

The move to larger wafers "has definitely been pushed

out from a timing standpoint," said Gary Dickerson,chief executive of Applied Materials Inc., AMAT +1.99

a big maker of semiconductor-manufacturing tools

 based in Santa Clara, Calif.

He said one of his company's large customers, which h

didn't identify, told Applied that it wouldn't make the

 wafer shift by the end of the decade.

Chip makers have generally been reluctant to specify when they might roll out the new 

technology. But, in public meetings, industry executives have set 2016 as a target to

assemble the needed production gear.

Jonathan Davis, global vice president of advocacy for the equipment trade group SEMI

said 2018 is emerging as a new target. "I think you could say the schedule has relaxed,"

he said.

The status of the new technology was the focus of a gathering Wednesday in Albany,

N.Y., at the headquarters of an industry consortium whose participants include Intel,

Taiwan Semiconductor Manufacturing Co. 2330.TW +3.10% , Samsung Electronics Co

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005930.SE +0.54% , International Business Machines Corp. IBM -0.29% and

Globalfoundries Inc.

Silicon wafers are an important variable in the industry's continuing quest to reduce th

cost of chips, helping make it possible to add new capabilities to computers, mobile

phones and other electronic products. Following a pattern known as Moore's Law,

named for Intel's co-founder, companies also race to shrink the size of transistors on

chips to increase their speed, cost and data-storage capacity.

Larger wafers can produce more chips at a time, in much the way a larger cookie sheet

can bake a larger batch of cookies. Historically, each advance in wafers has reduced the

cost of each chip by around 30%, industry executives say.

Failing to move up to the next wafer size could undermine the industry's traditional

business model, said G. Dan Hutcheson, an analyst at VLSI Research. On the other

hand, he puts equipment-development costs for the next wafer size at $14 billion, and

says there is no guarantee of achieving meaningful cost savings per chip.

"Everyone knows it's going to be incredibly expensive and incredibly risky," Mr.

Hutcheson said. "There is no way to predict if it really will deliver the cost benefits."

Chip makers made their last transition about a dozen years ago, introducing wafers tha

were 300 millimeters, or about 12 inches, in diameter, about the size of a dinner plate.

The next proposed shift would enlarge them to 450 millimeters, or roughly the size of a

large pizza pan.

Wafer transitions often trigger tensions among chip makers and with the companies th

sell them production tools, over issues that include how development costs are shared.SEMI estimates that equipment makers spent about $12 billion on the last shift, with

many questioning whether they recouped that investment.

This time, companies hope to save money by doing more to standardize new tools and

manufacturing techniques. That goal led to the creation in 2011 of the five-company 

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G450C consortium, in a partnership with the State University of New York's College of 

Nanoscale Science and Engineering in Albany. Some of the first 450-millimeter tools ar

being tested in a new building there.

"The collaboration is some of the best I've seen," said Adrian Maynes, program director

for an affiliated organization called F450C and who works for M + W Group, a builder o

semiconductor factories.

But some chip manufacturers have been hesitant to make financial commitments, said

VLSI Research's Mr. Hutcheson. ASML, without naming specific customers, has

complained about a lack of "alignment" among them.

"Customers call the shots and, as a supplier, we follow the customer," an ASMLspokesman said. "In the absence of alignment, execution of ASML's 450-millimeter

program has been paused."

ASML's moves are closely watched because it supplies lithography tools needed to defin

circuit patterns on chips, and it has led to development of a long-awaited successor to

existing technology called EUV. In 2012 Samsung, TSMC and Intel all invested in the

company.

Intel's $4.1 billion investment included about $680 million to support ASML's 450-

millimeter tool development. Chuck Mulloy, an Intel spokesman, said Intel is

"adjusting" the flow of payments to ASML under that program.

The Silicon Valley giant, which in 2013 committed $2 billion to a factory building

designed for 450-millimeter equipment, has lately has been grappling with a slowdown

in spending on personal computers that use its chips. It recently said it is holding off outfitting another new factory in Arizona.

Intel also is concerned that it might wind up bearing too much of the cost of the 450-

millimeter transition.

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"We still believe 450 is the right thing to do," Mr. Mulloy said, estimating that the

company will roll out the technology by the end of the decade. "But we have been clear:

we will not do it ourselves."

Write to Don Clark at don.clark@wsj.com