Semiconductor Value Chain

Fujitsu, Panasonic Deal Makes Slow Progress

24 April 2014

A deal to combine the logic chip businesses of Fujitsu Ltd. and Panasonic Corp. – first announced 14 months ago – has received some additional financial detail but is not yet complete. A new fabless chip company is expected to come into existence before the end of the calendar year and will be led by Yasuo Nishiguchi, a former CEO of Kyocera Corp.

Under the latest memorandum of understanding the Japanese government-owned Development Bank of Japan Inc. will take a 40 percent stake in a new fabless chip company specializing in System LSI chips formed by Fujitsu and Panasonic. The investment is valued at 20 billion yen (about $195 million) and provide a 10 billion yen line of credit for the fabless chip company. The balance of voting rights in the new company is expected to be 40 percent with Fujitsu and 20 percent with Panasonic.

The company will comprise the system LSI business and associated intellectual property of Fujitsu's wholly owned subsidiary, Fujitsu Semiconductor Ltd., together with Panasonic's system LSI business and related intellectual property. It is expected to have about 3,000 employees and annual sales of about 150 billion yen (about $1.5 billion) based on the sales of the separate divisions in the year to March 31, 2014.

The intention is to create a world-class company with expertise in networking, video and imaging chips that is able to conduct an initial public offering within "several years" of its creation. The company will place priority on high growth markets such as cloud computing, big-data, and optical networks as well as in the fields of medical equipment and energy.

However, complete agreement on the details has not been reached. A signing of a final agreement is expected before the end of the June 2014 (the first quarter of fiscal year 2014) with a view to starting the business before the end of the year (the third quarter of fiscal year 2014).

Related links and articles:

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Fujitsu Backs SuVolta to Pursue DRAM, IoT

Panasonic Tops List of Auto Infotainment Suppliers

UMC, SuVolta Join Forces to Target Mobile Applications

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