LONDON – Japan's Fujitsu Ltd. and Panasonic Corp. have announced that they have agreed in principle to merge their system LSI businesses to create an independent fabless chip company.
The Development Bank of Japan Inc. has been asked to assist with investment and financing of the plan and Fujitsu and Panasonic said they are in discussions to finalize a contract and timetable for the creation of the company.
The companies said the as yet unnamed company will be independent of Fujitsu and Panasonic and would focus on offering chips that address high performance computing such as chips for servers and high-speed networking, visual processing and image recognition, mobile and low-power wireless connectivity.
In a joint-statement the two companies said that each of them owns advanced technology and intellectual property but that they overseas semiconductor manufacturers have risen in prominence in recent years. The statement added that by focusing on the design and marketing of chips under a fabless model Fujitsu and Panasonic aim to achieve growth in the chip business.
This reminds me of the merger of Sears and Kmart. Let's take two laggards, dress up their business a bit, merge them and create a high performer. This one will end the same way Sears and Kmart did - in a disappointment for the hopefuls.