Fujitsu Microelectronics Looks Forward Creating a Semiconductor Alliance

Fujitsu in Talks with Others “From Co-Development to Business Integration”

by Anton Shilov
09/10/2008 | 07:12 AM

Fujitsu Microelectronics, semiconductor business unit of Fujitsu, said in an interview that it was negotiating with other makers of semiconductors regarding aligning forces in order to strengthen positions and improve overall business efficiency. No actual deal has been announced, but the claim seems to be very important since Fujitsu is one of a few semiconductor firms that does not participate in any kind of alliance.

 

“From co-development to business integration, there are some potential ways for us to go. We are keeping our doors open on all options and our talks have not got into specifics yet,” Fujitsu Microelectronics president Haruki Okada said in an interview with Reuters news-agency.

The high-ranking executive indicated that the company was in talks with various chipmakers, including those in Japan as well as those abroad. The consultations were held amid warnings by Fujitsu that it would be uneasy to fulfill its promises regarding revenue targets and profitability as well as extended closures of semiconductor plant in Iwate prefecture due to earthquakes in June and July.

“There’s no denying that it is going to be tough to hit the targets. On top of a firmer yen, higher oil and raw materials prices, we've got earthquake damage to think about,” Mr. Okada is reported to have said.

Fujitsu Microelectronics originally aimed for ¥490 billion ($4.53 billion) in revenue and several billion yen in operating profit in the current business year, which ends in March, 2009.

Nowadays development of new process technologies to build chips is a very expensive and time-consuming process, which is crucially required to retain ability to manufacture state-of-the-art chips with rich functionality and high performance. Earlier this year Panasonic decided to develop its 32nm technology with Renesas, the semiconductor joint-venture between Hitachi and Mitsubishi; Toshiba will also develop its 32nm fabrication process together with IBM.

Besides costly development of manufacturing processes, companies like Fujitsu also have to utilize very expensive production equipment in their fabs and to constantly improve their workflow, which is also a very pricey process.

In order to maximize efficiency of its semiconductor business, Fujitsu may be very interested in either co-developing process technologies or even co-operation of the production facilities.