Panasonic has a strong history in consumer electronics, and Fujitsu played a pivotal role in the development of the first SPARC chips that drove Sun Microsystems, Inc. to prominence and helped create the distributed computing business on the strength of RISC-based processors. It now builds supercomputers, and it has made some progress in developing Ferroelectric Random Access Memory products.
Fujitsu spun out its semiconductor division in 2008 originally as Fujitsu Microelectronics (later renamed as Fujitsu Semiconductor). However, in August, 2013, Fuijitsu Semiconductor sold the company’s two crown jewels -- microcontroller and analog device businesses -- to Spansion. Left to Fujitsu Semiconductor’s main product lines were ASIC, ASSP and FRAM.
In February, just 18 months after trying to break into the smartphone semiconductor market through a joint venture with NTT Docomo and NEC, Fujitsu dissolved the venture. The company told The Register on Feb. 27 that the venture "wasn't able to obtain a large enough market share."
The short-lived attempt to compete against Qualcomm Inc. came just a year after a larger reorganization in which Fujitsu shed employees and facilities to cut costs and focus on the strongest parts of its business. As part of that effort, it sold one major plant to Denso Corp. and another to J-Devices Corp., and it said it would consolidate its other plant facilities into "a more compact and efficient organization."
The new, fabless chip design company was first presented in February 2013 as part of part of that reorganization, not as a strategic effort to build share in conjunction with a former competitor. Even that announcement seemed more like a layoff combined with the preservation of a cultural treasure than like a technologically sophisticated sortie into new markets:
In recent years… as market conditions have rapidly deteriorated and overseas semiconductor manufacturers have risen in prominence, the system LSI businesses of Fujitsu Semiconductor and Panasonic have been facing a severe business environment.
In light of this situation, Fujitsu and Panasonic have both come to acknowledge that bringing together their respective advanced technologies and customer bases is vital to build a competitive business globally. Focusing on system LSI marketing, design and development under a fabless model, Fujitsu and Panasonic aim to achieve future growth in system LSI businesses.
"They're selling off expensive resources, and maybe that's good, but if they're not just trying to get rid of costs and headcount and everything else, you have to wonder if these guys are ending up in a good position," Starnes said. "Is what they're doing going to break open that equation, or are they just going to be the 9th or 10th ones to climb on the same bandwagon?"
There's not much question, according to Takashi Yunogami, a director of Japan's Fine Processing Institute. He told EE Times in 2013 that the merger plan was just one more sad consolidation in Japan's rapidly shrinking semiconductor industry.
Excising struggling portions of two struggling companies, combining them into a third, and expecting the discarded child to do better than its parents is not a reasonable expectation, let alone a business plan, he said. "Negative one plus negative one makes negative three."
— Kevin Fogarty is a freelance writer for EE Times