NEC and Renesas looking to merge to beat downturn
The Asian semi-conductor industry has been hit hard by the fall in demand and the deepening crisis has meant that NEC and Renesas are reported to be in talks to proceed with a merger that is underpinned by the need to consolidate, cut costs and survive the downturn and dwindling demand.
The combined company would create Japan’s biggest chipmaker, surpassing Toshiba, although any deal is likely to be completed in about a year.
The group would have a 30 percent global share of the global market for car-based microcontrollers and be the third largest in the world.
The microchip industry has been caught up by drying demand, plummeting prices and oversupply. However a merger between the two companies has been the subject of much debate as both have a lot of overlapping businesses.
It will allow for effective and efficient restructuring of their operations and make it easier to cope with changes in an ever growing competitive market place.
Other members of the sector are also making arrangements as Elpida Memory is being coerced by the Japanese government to create new ties with firms in Taiwan.
The Japanese Ministry of Economy, Trade and Industry has stated that Japanese companies should carefully consider their options.
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