Japan electronic giants eye chip merger: reports

Feb 08, 2012
Employees of Japan's microprocessor maker Renesas Electronics are seen working at the company's Naka wafer factory in Hitachinaka, Ibaraki prefecture. Three of Japan's biggest electronics companies, including Renesas, are to join forces in a chip-making venture, according to reports, days after a swathe of dire results from a sector struggling to compete globally.

Three of Japan's biggest electronics companies are to join forces in a chip-making venture, according to reports, days after a swathe of dire results from a sector struggling to compete globally.

Panasonic, which earlier said it expected to lose more than $10 billion this year, is set to hook up with Renesas Electronics and Fujitsu as they look for economies of scale in an increasingly difficult marketplace.

The three companies will spin off their system chip design and development divisions to create a new company in an effort to ensure the survival of the Japanese , the daily and Kyodo news said.

The new firm will develop system chips for smart phones, automobiles and other products and will go head to head with their US and South Korean rivals including Intel and .

The joint venture will receive several hundred million US dollars from government-backed investment fund Corp. of Japan (INCJ) to be invested in the development of new products, the Nikkei said.

If realised, the plan will create a company with annual sales of 500 billion yen ($6.5 billion).

The reports came a few days after Panasonic said it expected to post its worst-ever net loss of 780 billion yen in the year to March 2012. Renesas said it was eyeing a 57 billion yen hole in its balance sheet, citing declining demand for system chips in Europe and China.

Fujitsu said it would stay in the black, but forecast its net profit for the year would be just 35 billion yen, down 36.5 percent on year.

The move will leave Toshiba as the only other Japanese company still making system chips used for electronic devices and automobiles.

, Fujitsu, Panasonic and INCJ aim to reach a basic agreement by the end of March, the Nikkei said.

The three companies declined to comment on the report.

"We are considering various plans on the growth strategy of , but we don't have anything to announce at this point," said Panasonic spokeswoman Kyoko Ishii.

Explore further: WellPoint 2Q tops Wall Street expectations

add to favorites email to friend print save as pdf

Related Stories

Japanese firms in talks on microchip merger

Apr 16, 2009

Renesas Technology Corp. and NEC Electronics Corp. are in merger talks to create Japan's top chipmaker as they seek to survive the global recession, reports said Thursday.

Japan's Fujitsu hit by third-quarter loss

Jan 31, 2012

Japanese high-tech giant Fujitsu plunged into a net loss for the three months to December, it said Tuesday, as it slashed its full-year sales and profit forecast.

Toshiba returns to black on smartphone chip demand

Jan 31, 2011

(AP) -- Toshiba Corp. said Monday it returned to the black in the October-December quarter thanks to robust global demand for the flash memory chips used in digital cameras and smartphones.

Japan's Panasonic set for $10.2 billion loss

Feb 03, 2012

Japan's Panasonic on Friday warned it would see its worst-ever net loss of 780 billion yen ($10.2 billion) for the year to March, blaming the strong yen, flooding in Thailand, and acquisition costs.

Recommended for you

Sony surprises with first quarter profit

3 minutes ago

(AP)—Sony reported a surprise eightfold jump in quarterly profit as sales got a perk from a cheap yen and its bottom line was helped by gains from buildings and its stake in a video-game maker.

Samsung profit falls as smartphone sales slow

17 minutes ago

(AP)—Samsung Electronics Co. reported a bigger-than-expected fall in second quarter profit on Thursday and said it was uncertain if earnings from its handset business would improve in the current quarter.

Why let your sales force influence product prices?

19 hours ago

From the outside, you might not notice the ongoing tension within many large businesses: the battle between salespeople, on the one hand, and marketers and product managers, on the other. Because the salespeople ...

User comments : 0