Three of Japan’s biggest electronics companies are to join forces in a chipmaking venture, reports said yesterday, days after a swathe of dire results from a sector struggling to compete globally.
Panasonic Corp, which earlier said it expected to lose more than US$10 billion this year, is set to hook up with Renesas Electronics Corp and Fujitsu Ltd as they look for economies of scale in an increasingly difficult marketplace.
The three will spin off their system chip design and development divisions to create a new firm in an effort to ensure the survival of the Japanese chip industry, the Nikkei Shimbun and Kyodo news said.
The new firm will develop system chips for smart phones, automobiles and other products and will go head to head with their US and South Korean rivals, including Intel Corp and Samsung Electronics Co.
The joint venture will receive several hundred million US dollars from government-backed investment fund Innovation Network Corp of Japan to be invested in the development of new products, the Nikkei said. If realized, the plan will create a company with annual sales of ￥500 billion (US$6.5 billion).
The reports came a few days after Panasonic said it expected to post its worst-ever net loss of ￥780 billion in the year to next month. Renesas said it was eyeing a ￥57 billion hole in its balance sheet, citing declining demand for system chips in Europe and China.
The three firms declined to comment on the report.