The newly merged company will focus on system-on-chip semiconductors
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NEC Electronics and Renesas say the will merge operations and become the third largest semiconductor company in the world.
The two companies announced they plan to sign an agreement at the end of July to integrate their business operations. The merger will have to be approved by shareholder of both companies and various governmental agencies.
NEC Electronics and Renesas are the two largest microcontroller (MCU) suppliers. They also focus on system-on-chip (SoC) products. NEC Electronics is a leading producer of SoCs for digital consumer electronics, while Renesas is a manufacturer of SoCs for mobile phones and automotive applications.
The new integrated company will have three major product groups: MCUs, SoCs, and discrete products, and will become the world's third-largest semiconductor business. The two companies had combined 2008 sales of $12.8 billion.
The ownership ratio of the new company as well as the name and location of company headquarters will be decided through negotiations.
The planned merger of the companies is a sign of the economic times.
“We have seen consolidation of companies being stepped up over the past several months partly as a result of the recession,” says Trevor Yancey, vice president, technology of IC Insights. “Companies are trying to consolidate manufacturing resources. It’s not surprising.”
He says more consolidation is likely moving forward but it may slow up “if the industry picks up strongly as it is expected in the second half of the year.”
“You are going to see consolidation in particular areas especially memory with flash and DRAM,” says Yancey. Those segments have been hit hard by oversupply, sluggish demand and falling prices.
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BY Jim Carbone
Source：Purchasing
© 2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
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