SEMICONDUCTOR FIRMS Fujitsu and Panasonic will combine their chip design and development efforts to compete with foreign rivals.
Japan's semiconductor industry has been under seige from foreign vendors that have outpaced them in development and made use of cheaper labour costs, leading to Japanese chip vendors consolidating resources to remain competitive. Now Fujitsu and Panasonic have signed a memorandum of understanding to merge their semiconductor design and development operations.
Fujitsu and Panasonic said that their joint venture already has third party investors helping it to create a new fabless semiconductor company, with the Development Bank of Japan providing investment and financing for the deal.
The two firms said, "In recent years, however, as market conditions have rapidly deteriorated and overseas semiconductor manufacturers have risen in prominence, the system LSI [large scale integration] businesses of Fujitsu Semiconductor and Panasonic have been facing a severe business environment. In light of this situation, Fujitsu and Panasonic have both come to acknowledge that bringing together their respective advanced technologies and customer base is vital to build a competitive business globally."
The joint venture will focus on designing chips for high performance servers, image processing and wireless networks. Fujitsu has been marketing its Sparc chips for high performance computing clusters for several years and it is likely that Fujitsu will continue to design those, however chips for image processing and wireless networking applications arguably hold greater revenue potential for the two firms.
Fujitsu and Panasonic said that they are in "detailed discussions" to quickly finalise a contract. µ