5.The remaking of Japan Semiconductor Inc.
The restructuring of Japan's semiconductor industry is one of themes of 2002; in particular the plan to form Renesas Technology Inc. as a logic semiconductor company now expected to debut in 2003 as the world's second largest semiconductor company.
In fact, the nation's five major chip makers have now gone through major reorganizations in separate efforts to become more competitive in the world market.
For example, Toshiba Corp. and Fujitsu Ltd. formed a system-on-a-chip (SoC) alliance in June. And NEC Corp. spun off its semiconductor operation to a newly established subsidiary last November.
For many years Japan's vertically integrated business model, with several major electronics corporations also serving as major semiconductor companies, differed from the U.S. horizontally layered model but had served the country well.
But as competition has intensified and the cost of staying in the semiconductor game has mushroomed corporate Japan has started to re-organize. "Japanese companies are linking up in ways that would have been inconceivable five years ago," said Brian Matas, an analyst at IC Insights Inc. of Scottsdale, Ariz. "By joining forces, they hope to regroup and do whatever it takes to remain technologically competitive," he told EBN last March.
The first steps were taken in November 1999 with the formation of Elpida Memory Inc. by NEC Electronics and Hitachi Ltd. as a joint venture to receive those companies' DRAM interests.
In 2002, Elpida said on October 3, that it would take on Mitsubishi Electric Corp.'s DRAM division and form an alliance with Taiwan's Powerchip Semiconductor Corp. to boost its economies of scale. The deal was expected to make Elpida the world's fourth largest DRAM maker by revenue (see Oct. 3, 2002 story ).
The assimilation of Mitsubishi's DRAM division into Elpida is related to the formation of a parallel Japanese logic joint-venture company. The name Renesas Technology Corp. for the joint-venture formed by the merger of Hitachi's and Mitsubishi's non-DRAM chip businesses was
announced the same day (see Oct. 3, 2002 story) but about six months after the idea was originally disclosed by the companies (see March 24, 2002 story).
Hitachi is expected to own 55% of Renesas with Mitsubishi holding 45% and the company should debut on April 1, 2003 as a $7 billion company.
(Return to 2002 Top 10 list or go to No. 6).