Japan’s Tech Giants Mull Own Semi Business

Hitachi, Ltd., Toshiba Corporation and Renesas Technology Corp. are toying
with the notion of building a semiconductor company to help pad their
electronics businesses.

The Japan-based companies said in a statement they have started a
study on the “feasibility of an independent semiconductor foundry business
offering advanced fabrication processes to which each of the companies could
outsource fabrication.” Other than that, details were skimpy.

No outline for a company has been decided, according to a brief note on
Hitachi’s Web site.

Hitachi is a leading global electronics company that makes anything from PCs
to air conditioners to mobile phones. Ditto for Toshiba, which is also a
leader in the market for NAND Flash memory cards.

Renesas, a joint venture of Hitachi and Mitsubishi Electric Corp., offers
similar flash memory and other consumer products. But Renesas also designs
and manufactures semiconductor system solutions for mobile, automotive and
PC/AV markets.

The partnership would figure to make the technology giants more independent
and nimble to make chips for their electronics devices. By outsourcing chip
fabrication to a company devoted to the task, Hitachi, Toshiba and Renesas
could focus on other areas of their businesses.

This flexibility could be a key advantage over competition at a time when
semiconductor manufacturing is moving at a frenetic pace.

According to the Semiconductor Industry Association, worldwide sales of
semiconductors surpassed $20 billion in October, up 6.75 percent from the
$18.8 billion reported for October 2004.

Most of the sexy chip innovation is happening in computers and servers these
days, thanks to the advances in 64-bit computing and multi-core technology
from Intel, AMD, IBM, Sun Microsystems.

But no one can underestimate the potential for silicon enhancements in
consumer electronics devices such as handheld computers, smartphones, and
Flash memory devices that enable users to store several megabytes of
information. This is where Hitachi, Toshiba and Renesas could gain ground.

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