Renesas, Fujitsu, Panasonic to merge IC ops

Three chip vendors in Japan are looking to combine their system chip operations. Renesas Electronics Corp., Fujitsu Ltd and Panasonic Corp. are ironing out the details of the planned integration of their IC manufacturing, said a report from 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., based on the report.

South Korea trounced Japan If this is a move to regain the country's IC leadership in Asia, they better have a solid, long-term strategy. South Korea has surpassed the country in terms of chip sales for the first time last year, and I don't think luck has anything to do with it. The global IC market has been experiencing continual downturns, but the resilience of South Korea has proven to be remarkable. This consolidation of IC manufacturing operations may turn Japan's IC industry around.

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 added.

INCJ would invest hundreds of millions of dollars in the new company, according to the Nikkei report, in which the joint venture would likely acquire one fab from Renesas and one from Fujitsu. The joint venture is also in final discussions to purchase Elpida Memory Inc.'s lone fab in Japan, Nikkei reported.

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 next year. According to Nikkei, such a plan would leave Toshiba Corp. as the only other Japanese company still making system ICs.