Press release; Adam Connors, DigiTimes.com [Tuesday 19 March 2002]
Hitachi and Mitsubishi Electric reached an agreement on March 18 to integrate their system LSI (large-scale integration) chip businesses and the bulk of their semiconductor operations. The announcement came after the close of the Tokyo share market.
Both companies are examining shifting their system LSI operations, which include microcontrollers (MCUs) and logic, analog and discrete devices, to a new joint venture to be established about a year later.
The announcement comes as Japan is trying to reinvigorate its once-dominant chip industry as it struggles to compete against US, Taiwan, South Korean and China players.
By leveraging the respective core strengths of Hitachi and Mitsubishi Electric’s system LSI products, plus their 700 billion yen combined revenues, the new company will become the world’s third-largest chip maker behind Intel and Toshiba with its focus in the mobile, network, automotive and digital home electronics application areas.
Although specific details will be determined at a later date, the new company will form an independent management structure and act as the nucleus of Hitachi and Mitsubishi Electric’s respective semiconductor organizations. Upon the establishment of the new company, both companies will decide on a common brand.
Hitachi holds the world’s top market share for 16-bit MCUs and its IC card MCUs enjoy a strong market presence. It is currently the world’s eighth-largest chip maker.
Mitsubishi Electric is also a strong contender in the 16-bit MCU market, but currently does not rank among the top 10 chip makers.
With this agreement, the new company will be able to utilize their accumulated system LSI technologies and products. According to Reuters, Hitachi and Mitsubishi Electric have played down any disruption in their respective alliances with Matsushita Electric Industrial and STMicroelectronics (ST).
Related stories:
2Q motherboard and chipset sales estimate: Down 10-15% from 1Q (Mar 15)
Toshiba and Matsushita outline LCD joint venture (Feb 6)
NEC took top spot in Japan’s 2001 PC market (Feb 1)
Japan’s IC sector finds new oasis in China (Apr 17, 2001)
