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docdivakar
@Junko: the maneuvering seems to draw some inspiration from the formation of ...
junko.yoshida
I am not certain if Toshiba has indeed been able to keep its head above the ...
Nikkei: Japanese firms look to merge system IC units
2/7/2012 1:09 PM EST
SAN FRANCISCO—Japanese chip vendors Renesas Electronics Corp., Fujitsu Ltd. and Panasonic Corp. are in discussions about the possibility of integrating their system chip operations, according to a report Tuesday (Feb. 7) by Japan's Nikkei news service.
Under the proposed plan, the three companies' chip manufacturing divisions would be separated from their design divisions and integrated into a joint venture that Innovation Network Corp. of Japan (INCJ), a government-backed investment fund, is creating with Globalfoundries Inc., Nikkei reported.
Renesas, Fujitsu and Panasonic would spin off their system chip design and development divisions to create a new company to develop chips for smartphones, automobiles and other products, Nikkei reported.
INCJ would invest several dozen billion yen (hundreds of millions of U.S. dollars) in the new company, according to the Nikkei report. The new JV would likely acquire one fab from Renesas and one from Fujitsu, according to the report. The JV is also in final discussions to purchased Elpida Memory Inc.'s lone fab in Japan, Nikkei reported.
Nikkei reported that Renesas, Fujitsu, Panasonic and INCJ are hoping to reach a basic agreement by the end of March, with a goal of integrating operations by the end of March 2013.
According to Nikkei, such a plan would leave Toshiba Corp. as the only other Japanese company still making system ICs.
Under the proposed plan, the three companies' chip manufacturing divisions would be separated from their design divisions and integrated into a joint venture that Innovation Network Corp. of Japan (INCJ), a government-backed investment fund, is creating with Globalfoundries Inc., Nikkei reported.
Renesas, Fujitsu and Panasonic would spin off their system chip design and development divisions to create a new company to develop chips for smartphones, automobiles and other products, Nikkei reported.
INCJ would invest several dozen billion yen (hundreds of millions of U.S. dollars) in the new company, according to the Nikkei report. The new JV would likely acquire one fab from Renesas and one from Fujitsu, according to the report. The JV is also in final discussions to purchased Elpida Memory Inc.'s lone fab in Japan, Nikkei reported.
Nikkei reported that Renesas, Fujitsu, Panasonic and INCJ are hoping to reach a basic agreement by the end of March, with a goal of integrating operations by the end of March 2013.
According to Nikkei, such a plan would leave Toshiba Corp. as the only other Japanese company still making system ICs.
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selinz
2/7/2012 4:19 PM EST
So what are the potential benefits? 1) Share IP. Maybe 2) close plant sites/consolidate.. Doubtful 3) Get a big chunk of money to from "uncle sam." Now that makes sense.
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TingLu
2/7/2012 4:44 PM EST
At this merging rate, soon there will be only one Semiconductor Company in Japan.
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dylan.mcgrath
2/8/2012 12:35 AM EST
Actually, this deal would result in at least one and probably two additional Japanese chip firms being born, according to the Nikkei report. Renesas, Fujitsu and Panasonic would continue to exist and presumably market their own chips (MCU, etc.), but their SoC operations would be rolled together into what would presumably be a fourth new company. And a fifth company, a foundry, would be created in a JV with Globalfoundries, if the report is accurate.
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eewiz
2/8/2012 12:15 PM EST
They could as well simply consolidate all semi operations of these companies. Anyway Jap semi companies sales are mostly limited to japanese market. With a few exceptions like Toshiba, Renesas most of the semi divisions (sony,panasonic) are supported by internal sales. Whats the point of keeping separate semi divisions, if they cant successfully compete globally?
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goafrit
2/7/2012 8:20 PM EST
Japan is simply on crises. It is time they need to think if they need a NEW plan to survive. There are many crises in that nation in this industry.
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resistion
2/8/2012 12:08 AM EST
Nikkei similarly reported the rumors regarding Elpida-Micron. Elpida's stock responded correspondingly.
Diversification investment is the only insurance against consolidation. Regretfully, only Samsung, the company everyone fears, or perhaps more accurately, the government behind it, executed this correctly.
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chipmonk
2/8/2012 12:57 PM EST
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 ?
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junko.yoshida
2/8/2012 1:15 PM EST
I am not certain if Toshiba has indeed been able to keep its head above the water. It has its own problems. The proposed deal involving the three companies reflects more of the history that goes back among those three companies, I think.
Panasonic, for example, worked with Renesas on its 32-nm process technology. So, I wouldn't read too much into this -- why those three and why Toshiba not involved.
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docdivakar
2/13/2012 4:37 PM EST
@Junko: the maneuvering seems to draw some inspiration from the formation of Global Foundries but I would also caution this -TSMC is always lurking in the corner with its dominance over others. If the joint effort is truly operated as an independent unit, it will have to deal with that business reality and operate accordingly.
MP Divakar
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