October 3, 2002
(IDG News Service)
Mitsubishi Electric Corp. and Hitachi Ltd. have agreed to strengthen their semiconductor businesses by forming a joint venture that will focus on system large-scale integration (LSI) operations, the two companies announced today.
The agreement finalizes a decision made in March to integrate the companies' system LSI businesses.
The new company, Renesas Technology Corp., is expected to be established April 1. Hitachi will own 55% of the company and Mitsubishi Electric 45%. Both will move most of their semiconductor operations, including microcomputers, logic, analog and discrete devices and flash and static RAM memory to the new company.
By focusing on the mobile, network automotive and digital home electronics application fields, the new company plans to achieve $7.3 billion in business during its first fiscal year.
Mitsubishi Electric Executive Vice President Koichi Nagasawa will be appointed chairman and CEO, and Hitachi Senior Corporate Officer Satoru Ito will be president and chief operating officer of Renesas, the companies said.
"Nowadays, it is too risky for a single company to invest in development and infrastructure [in the semiconductor industry]," said Etsuhiko Shoyama, president and CEO of Hitachi, at a news conference. "We definitely want to make this joint venture the world's top-class chip company."
Although Mitsubishi Electric and Hitachi hope Renesas will operate independently from its parent companies, Mitsubishi sees it as important for the company to work closely with Renesas, said Tamotsu Nomakuchi, president and CEO of Mitsubishi Electric. Hitachi, meanwhile, hopes to make use of Renesas' research and development center, Shoyama said.
Mitsubishi Electric, which had been seeking ways to scale down its dynamic RAM businesses, also announced plans to transfer its standard DRAM business to Elpida Memory Inc., a joint venture of Hitachi and NEC Corp.
Elpida plans to gain the right to acquire all of Mitsubishi Electric's standard DRAM products by the end of March, and ultimately, Mitsubishi plans to withdraw from all of its standard DRAM business, including production, said Katsuhiro Tukamoto, Mitsubishi Electric's memory division manager. The company's technological tie-up with Taiwanese foundry Powerchip Semiconductor Corp. will be taken over by Elpida, the three companies said.
With this agreement, Elpida will become the only DRAM supplier in Japan, said Kenji Tokuyama, president and CEO of Elpida.