Hitachi, Mitsubishi Finalize Chip Sales JV

Consumer electronic giants Hitachi and Mitsubishi Electric
on Thursday finalized plans to merge semiconductor sales into a separate company:
Renesas Technology Corp.

The two Japanese firms formally inked a deal to establish a joint
venture — Hitachi will assume a 55 percent stake and Mitsubishi takes the
remaining 45 percent — aimed at merging their domestic chip sales on April
1 next year.

Renesas Technology Corp. will take a 100 percent stake in the new sales company,
Hitachi and Mitsubishi said.

Hitachi and Mitsubishi initiated discussions about Renesas (derived from Renaissance Semiconductor for Advanced Solutions) earlier in the year, and came to an agreement on March 18.

The two firms also disclosed plans to consolidate sales of semiconductor
chips in the U.S., Europe and Asia in the first half of 2003.

The newly-capitalized Renesas Technology will power the end-to-end
management of chip operations for Hitachi and Mitsubishi Electric — from
development, design and manufacture through sales, service and support.

In the system LSI market, the firms said Renesas Technology would move to
secure a stable operating base with microcomputers as its flagship business
in micro controllers. It would also push the companies’ operations in
analog, flash memory and discrete devices.

Renesas Technology’s management would also be tasked with expanding
operations in the System on Chip (SoC) domain by targeting new markets with
products that combine microcomputer, logic and analog technologies.

“In particular, Renesas Technology aims to establish leading positions in
the mobile, network, automotive, and digital home electronics fields,” the
companies said in a statement.

When the Tokyo-based company is established, it will employ about 27,200
workers on a group basis.

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