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Rumored Japanese chip merger by the numbers

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resistion
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re: Rumored Japanese chip merger by the numbers
resistion   2/8/2012 3:49:54 AM
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Nikkei really likes to report a lot of rumors. Maybe they play a "buy on the rumor, sell on the news" stock strategy.

junko.yoshida
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re: Rumored Japanese chip merger by the numbers
junko.yoshida   2/8/2012 5:33:41 PM
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we think that this is more than "just a rumor." Judging from the responses from those companies involved in the proposed deal, while they are not saying much, nobody is outright denying that it is completely false. Whether things will turn out the way it is currently reported by Nikkei remains to be seen. But Dylan's story here -- by the numbers -- lays out what is at stake.

docdivakar
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re: Rumored Japanese chip merger by the numbers
docdivakar   2/8/2012 7:45:07 PM
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Hi Junko, do you think these moves are more or less (& perhaps) a tacit admission by Japanese Semico's that organic growth is just not their cheese and M&A is the path to survival? There is still a significant amount of research churned out by Japan-based universities and enterprises in the semiconductor area -take a cursory look at JJAP articles, for example. It is disappointing that these are not being leveraged efficiently in business. MP Divakar

WW Thinker
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re: Rumored Japanese chip merger by the numbers
WW Thinker   2/9/2012 7:09:04 AM
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This may not be a rumor. With NEC Corp loosing US$1.3B, Panasonic loosing more than US$3B, how is Renesas going to get enough operating cash for FY2012 given that Renesas already announced the loss of more than US$500M for H1FY2011? With the WW economy in CY2012 looking flat, with the competitors more hungry than ever, with no hope of making money with the SOC products, can the parent companies keep putting up the cash from the dwindling supply to keep the off-spring alive? What's the likelihood for Renesas to be in the black in FY2012, and FY2013? NEC Corp, Fujitsu Corp, Panasonic Corp are not in the charity business, are they?

mi0729
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re: Rumored Japanese chip merger by the numbers
mi0729   2/10/2012 2:30:51 AM
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Hi Junko, I agree the consolidation is not just a rumor but will happen very probably. An important aspect of this move is that Japanese auto makers including Toyota and Nissan support or possibly request it. Using the leading-edge electronics technologies is critical for the success of EVs/HVs and the 3 chip makers have been providing custom LSIs as key parts.

chipmonk0
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re: Rumored Japanese chip merger by the numbers
chipmonk0   2/8/2012 5:59:08 PM
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The failure of the established semiconductor industry of Japan to keep up with the rise of lower cost semiconductor industry in Taiwan & Korea ( aided and abetted by profit maximizing US Corp.s who have xferred technology to them ) is the most obvious reason behind the current crises. But not all Japanese semicos have gone downhill, e,g. Toshiba. So how has Toshiba been able to keep its head above the water ? How are they different from these 3 Japanese semiconductor / electronics conglomerates now considering merger ? Any comments ?

mcgrathdylan
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re: Rumored Japanese chip merger by the numbers
mcgrathdylan   2/8/2012 7:26:28 PM
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Toshiba is an integrated electronics company, not just a chip maker. But the same is true of Fujitsu and Panasonic. Why has Toshiba been more successful? I really don't know. I am curious what people have to say about that myself...

WW Thinker
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re: Rumored Japanese chip merger by the numbers
WW Thinker   2/9/2012 7:01:01 AM
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Toshiba is lucky because it gave up DRAM and shifted to NAND Flash earlier. It is either a calculated bet or luck.

junko.yoshida
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re: Rumored Japanese chip merger by the numbers
junko.yoshida   2/8/2012 7:42:45 PM
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Just to be clear, they are not talking about the merger of these three conglomerates. They are discussing the potential consolidation of only the chip divisions of these companies. (But of course, Renesas of the three is an exception since it is a pure play semi company.) As to why the chip divisions of Panasonic and Fujitsu are struggling, please read the story here: http://www.eetimes.com/electronics-news/4235963/Commentary--Japan-Inc--faces-choppy-seas But as for why Toshiba keeps its head above the water...I don't necessarily think that Toshiba's semiconductor business is doing particularly better than others. But when you look at its parent company -- Toshiba Corp., the company is heavily in the infrastructure business, designing and building electronics equipment for heavy electronics; nuclear power plants, etc. So, Toshiba, in that sense, is in a much different situation than Panasonic who has to compete with every new TV company popping up in China in the global consumer electronics market.

WW Thinker
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re: Rumored Japanese chip merger by the numbers
WW Thinker   2/9/2012 6:59:17 AM
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The semiconductor division of Toshiba is making money because mostly of the NAND Flash. Because Toshiba TV is not selling well, its version of CELL (SOC implementation) will likely be bleeding. As long as NAND Flash is still contributing to the "overall" black ink, it is in no hurry to give up the SOC or the semiconductor operation. Once NAND Flash start to bleed (likely happen soon), we will see Toshiba yelling for help.

pkandel
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re: Rumored Japanese chip merger by the numbers
pkandel   2/8/2012 9:33:31 PM
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There is an important market background here as well. On the one hand, SoCs are getting more and more expensive as they get more complex and as process technology advances, and on the other hand SoCs need to continuously integrate more and more IP. Companies need enormous scale to make advanced SoC development worthwhile. I have no idea if this rumor is for real, but there will certainly be semiconductor consolidation over the next couple years.

any1
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re: Rumored Japanese chip merger by the numbers
any1   2/9/2012 2:12:13 PM
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I agree that Toshiba is generally doing better than other Japanese semis mainly due to the volume of NAND flash coming out of it's massive Yokkaichi complex, which has been built out in partnership with SanDisk. This economy of scale helps support the non memory parts of Toshiba's semi operations.

Steve Szirom (InsideChips)
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re: Rumored Japanese chip merger by the numbers
Steve Szirom (InsideChips)   2/9/2012 4:13:29 PM
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Intellectually and strategically, it makes sense for Japan to combine Renessas, Panasonic and Fujitsu chip manufacturing into one entity. After all, it is difficult for individual companies (except Intel) to keep up with fab innovations due to costs. Organizationally, it seems it will be difficult...perhaps that is why they brought in Global Foundries into the deal. At best, it will take time to merge these manufacturing units effectively. I think this will make Japan IC chips more of a captive market within its own systems divisions. Steve Szirom, InsideChips.com.

WW Thinker
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re: Rumored Japanese chip merger by the numbers
WW Thinker   2/10/2012 2:11:57 AM
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As long as the combined entity, if happened, does not prune the products which have very little chance to be #2 or #3, together with the related human resources, the merge can only prolong when the eventual demise is going to happen.

mcgrathdylan
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re: Rumored Japanese chip merger by the numbers
mcgrathdylan   2/10/2012 1:33:20 AM
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The involvement of Globalfoundries and the proposed manufacturing JV is the most interesting aspect of this deal to me. Assuming that the Nikkei report is accurate, I would be very interested to see how they will structure such a deal and how the manufacturing JV will be able to turn a profit.

resistion
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re: Rumored Japanese chip merger by the numbers
resistion   2/10/2012 12:52:27 PM
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Merger from two companies already very difficult, even more would be even harder to carry out, we're still talking coordinated spin-offs. The problem is SoC market not large enough for Japan.

t.alex
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re: Rumored Japanese chip merger by the numbers
t.alex   2/10/2012 1:26:54 PM
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Renesas itself is a multitude of mergers, from Hitachi, Mitsubishi in the past and recently NEC electronics. Hopefully the product ranges will get more streamlined.

CityChipMan
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re: Rumored Japanese chip merger by the numbers
CityChipMan   2/10/2012 4:04:31 PM
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I'm a bit wary of three-way mergers; just look at ST-Ericsson! (OK they have other problems in addition) and GlobalFoundries doesn't look like a massive success at this point either. Any more word on Elpida's possible involvement?

WW Thinker
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re: Rumored Japanese chip merger by the numbers
WW Thinker   2/11/2012 6:42:11 PM
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ST-E is not looking good at the moment especially considering the mega-merge happened even earlier than the formation of Renesas Electronics in Apr2010. With the engineering teams, presumably coming with the relevant IPs, from EMP, Nokia, Philips, STM, shouldn't ST-E have the most IPR, even more than Qualcomm? If so, this is a huge competitive edge. So far, they are not winning the AP/Integration race in leaps and bounds ...

resistion
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re: Rumored Japanese chip merger by the numbers
resistion   2/13/2012 1:27:20 PM
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Renesas recently advocated TSV technology for DRAM with mobile SOC's. If the rumor is correct, it's going to get spun off as well. Yet another example the adoption of new technology like TSV is suffering from consolidation. http://techon.nikkeibp.co.jp/english/NEWS_EN/20120119/203730/

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