(FORTUNE Magazine) – JUST about everybody in the global electronics industry agrees that this is the Decade of the Strategic Alliance, and for good reason. As telecommunications, computers, consumer electronics, and media converge, the makers of complementary and competing technologies realize they'll have to gang up to tame chaotic markets and to share the ever-growing cost and complexity of product development. American companies, notably IBM, Apple, AT& T, and Motorola, have been quickest to trade old rivalries for new partnerships. Japan's famously redundant and often arrogantly self-sufficient electronics behemoths are only now getting serious about joint ventures. Then there's Toshiba Corp. While others talk about the coming age of high- tech alliances, Toshiba has been living it. For decades. Those alliances are now making Toshiba a uniquely tough competitor in two ways: They are helping the company weather an economic slowdown in Japan that has hobbled competitors, and they are giving it broad access to some of the most important and most promising technologies of the digital age. The oldest and third largest of Japan's electronics giants (after Hitachi and Matsushita), Toshiba over the years has made strategic alliances a cornerstone of its corporate strategy. Starting in the early 1900s when it contracted to make light bulb filaments for General Electric, Toshiba has used partnerships, technology licensing agreements, and ambitious joint ventures to complement its own considerable innovative skills and manufacturing mettle. That recipe enabled it to become one of the world's leading makers of all things electric -- from gargantuan power plant equipment to refrigerators to the most elaborate memory chips. Toshiba's list of strategic partners includes many of the industry's blue bloods (see chart). Nor are these cooperative ventures merely nickel-and-dime resale or licensing agreements. Some involve billions of investment dollars by both parties, in R&D as well as in plants and equipment. And they are producing technologies and goods no one else can rival. There may have been a time when Toshiba felt a little sheepish about its reliance on other companies, but its alliances are now the envy of Japan Inc. Tohoku Semiconductor, its five-year-old joint venture with Motorola, has helped entrench Toshiba as the world's No. 1 maker of large-scale memory chips. With IBM's help, Toshiba has come from nowhere in just three years to become the second-largest supplier of color flat-panel displays for portable computers (see accompanying box). Other partnerships yield nuclear and steam power generating equipment, computers, fax machines and copiers, advanced semiconductors, rechargeable batteries and fuel cells, medical equipment, and home appliances. Fumio Sato, Toshiba's president and chief executive, flatly contends there can be no other strategy for any high-tech company with global ambitions. ''It is no longer an era in which a single company can dominate any technology or business by itself,'' he says. ''The technology has become so advanced, and the markets so complex, that you simply can't expect to be the best at the whole process any longer.'' Even without partnerships, Toshiba would be a respectable competitor and innovator. It was Toshiba, not GE, that in 1925 invented the inside-frosted, nonglare incandescent light bulb. Though Toshiba engineers did not invent color TV, they were the first in the world to figure out how to make color picture tubes in large volumes. Each year the company sends a blizzard of applications to the U.S. Patent Office. Last year it filed more than 1,000, second behind Canon. Despite its own technological and manufacturing prowess, Toshiba knows that it cannot rely solely on itself in the new world of digital electronics. The computer, telecommunications, and consumer electronics industries are coalescing around a few key technologies and components. But these high-tech building blocks -- high-speed microprocessors, capacious memory chips and data storage devices, flat-panel displays, and the software to make them all work together -- are becoming too costly to develop solo. For example, Toshiba expects that the next-generation dynamic random-access memory chip will cost upwards of $1 billion to develop, a sum far beyond the means of any single company. So it has solicited both the financial and technical help of IBM and Siemens. Compounding the problem is the dreary world economy, which during the past few years has sapped the resources of electronics companies. While Toshiba hasn't sagged into the red like rivals NEC and Fujitsu, its growth has stagnated and profits have shriveled since the turn of the Nineties. For the year ended March 31, profits fell 48% to $165 million, as sales dropped 2% to $37 billion, and the company doesn't foresee a sharp rebound soon. Clearly, Toshiba and its friends need one another now more than ever. How has Toshiba managed to corral so many world-class partners? The company's early success as an alliance maker is part of it. Toshiba learned from GE over more than eight decades. Along the way, GE became part owner of Toshiba, holding as much as half of the Japanese company's stock prior to World War II. During the war, GE was forced to divest its Toshiba holdings, but afterward the two companies renewed their friendship. Since then the relationship has diminished, but it is still considered the model for Toshiba's other ventures. The company constructs its alliances so that the roles and rights of each company are clearly defined from the very beginning. Each pact includes the corporate equivalent of a prenuptial agreement, so both sides know who gets what if the partnership doesn't work out. Says Tsuyoshi Kawanishi, a Toshiba director and the senior executive vice president in charge of partnerships and alliances: ''During honeymoon time, everything is great. But as you know, divorce is always a possibility, and that's when things can get bitter.'' TOSHIBA currently is engaged in more than two dozen major partnerships and joint ventures and has yet to experience an ugly falling out. One big reason is that senior management plays an active role in each relationship. Says Jack Welch, CEO of GE: ''I've dealt with Toshiba for 15 years, and it's always been a very easy relationship. When things go awry, a call to Sato-san will take care of the problem in 24 hours.'' Toshiba hopes to ride the coming multimedia wave. It is developing, with Apple Computer, CD-ROM-based multimedia players that plug into a TV set. Toshiba also invested $1 billion in the entertainment arm of Time Warner, which is the parent of FORTUNE's publisher. It is working with the media company to design advanced interactive cable television technology. In electronics, Toshiba started out far behind its rivals in the early 1980s. The company scrambled mightily and by the end of the decade became the world's biggest supplier of high-volume, dynamic random-access memory chips (DRAMs). But to stay on top in a business that demanded both huge amounts of capital and nonstop research, the company realized that it had to have help. So in 1987, Toshiba persuaded Motorola, then the largest U.S. semiconductor maker, to set up a jointly owned enterprise in Japan to design and make Toshiba's DRAMs and Motorola's microprocessors. Initially, the two chipmakers came up with $125 million apiece to start Tohoku Semiconductor. Each company has since invested $480 million more. It's been a rewarding relationship for both. And the experience has prompted Toshiba to enter into partnerships with nine other chipmakers to design or make semiconductors. The most notable alliance is a $1 billion effort with IBM and Siemens to produce the next-generation DRAM -- a single chip that will hold 256 million bits of information, or roughly 8,000 typewritten pages. In addition, Toshiba has invested $320 million in its joint venture with IBM to build flat-panel displays. AS A COMPUTER MAKER, Toshiba is far from a powerhouse, despite its success selling portable IBM-compatible personal computers in the U.S. and Europe. One reason is that the company decided back in 1978 not to bloody itself trying to compete in the crowded mainframe computer business in Japan, leaving that market to IBM and Japanese rivals Fujitsu, Hitachi, and NEC. That is looking more and more like a prescient strategy, considering what has happened to mainframe giants like IBM and Fujitsu as more customers opt for networks of smaller computers. Moreover, not having to support costly proprietary mainframe systems makes it easier for Toshiba to join forces with other manufacturers and embrace newer technologies. Toshiba's chief partner is Sun Microsystems, the leading maker of microprocessor-based workstations that are now beginning to replace mainframes. Toshiba provides portable versions of the workstation, and also incorporates Sun's machines in complex systems that control power plants, route highway traffic, and oversee automated manufacturing. One weak spot is telecommunications equipment, which, ironically, is Toshiba's original business. (When it was founded in 1875, its first products were telegraph machines.) Here again, Toshiba's joint ventures aim to give the company technical expertise or market experience -- or both -- that it doesn't have. With Ericsson of Sweden it is developing mobile telecommunications equipment. In a sense, Toshiba's investment in Time Warner indirectly gives it entree into the cable television business. Still, according to Sato, one of Toshiba's top priorities is to find a high-profile partner to help it push into telephone switching systems. With all these alliances, you might think Toshiba would have difficulty balancing its partners' interests. But Sato contends that being open about all Toshiba's connections precludes most problems. Says he: ''Our relationships are more like good friendships than like marriages. Good friends don't really mind if you have other good friends.'' There's one other big reason Toshiba is willing to work with so many others. In a word -- speed. Sato, whose background is in manufacturing management, is obsessed with streamlining and accelerating every aspect of Toshiba's business, from product design to manufacturing to distribution. Says he: ''My definition of big-corporation disease is simply this -- too much fatty tissue. And that hinders speed, either in a person or in a corporation. The cure is simple, and that is to move quickly, because speed makes it more difficult for fatty tissue to build up.'' He thinks that carefully chosen partners are the key to moving quickly and marshaling the resources necessary to keep up with the high-tech race. That's what Toshiba is doing in every phase of its business. In today's inclement environment, Toshiba may seem to be spinning its wheels as it tries to climb out of a muddy ditch. But it has lots of friends giving it a push, and when it gets some traction on smooth, dry pavement, it will be one tough company to catch.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: TOSHIBA'S CIRCLE OF FRIENDS