Friday, February 10, 2012

No. 433: Ongoing negotiations on business integration to survive in the semiconductor business (February 10, 2012)

Business trend
The Japanese semiconductor industry is in the middle of restructuring that involves not only the troubled Elpida Memory jointly developed by NEC and Hitachi in 1999 but also leading companies. Renesas Electronics, Fujitsu, and Panasonic are negotiating with a view to integrating their semiconductor operations. With the investment from Innovative Network Corporation of Japan (INCJ), a private-public investment fund, the three companies will establish a company specializing in the design of semiconductor. If the restructuring plan materializes, only two companies, the new company and Toshiba, will produce system LSIs in Japan. The four concerns are scheduled to reach an agreement by the end of March.

The new company will develop the system LSI for vehicles and smartphones by combining the image processing and communication technologies to be provided by the three companies. It specializes in designing, and a new company to be established by the INCJ and Global Foundries in California of the U.S. will specialize in production. The new company for the production will reportedly purchase a production plant from each of Elpida, Renesas, and Fujitsu. Because the requirements of automakers and electronics makers are diverse, semiconductor producers have to produce a wide variety of products in small quantity. Therefore, restructuring is inevitable because continuous investment of 100 billion yen is vital per plant is required to survive. The world semiconductor market grew 18.7% on a year-on-year basis to about 5,950 billion yen in 2010.   

No comments:

Post a Comment