FSII's big customs in Japan are ging to do something.
Sony/Fujitsu: Japanese groups link to develop chips
SATURDAY JANUARY 24 1998
By Michiyo Nakamoto in Tokyo
Sony and Fujitsu, the Japanese electronics companies, are joining forces in the development and production of advanced semiconductors. They will jointly develop process technology for next-generation system large scale integration chips, build a manufacturing line in Japan, and share their intellectual property. The deal underlines the pressures facing semiconductor manufacturers amid high investment costs and rapid changes in the market. The new production facility is expected to cost about 150bn (œ688m). System LSI chips reduce the size of products and power consumption. They have a wide range of applications from cellular phones to CD players. They are in growing demand,particularly in the consumer electronics industry. The agreement highlights the critical importance, in rapidly changing markets,of semiconductor manufacturers and users working closely together to produce application-specific chips. The agreement links a big user of chips, Sony, and one of its main suppliers, Fujitsu. "By joining with Sony, we can have a co-operative environment where we can get more and more of the intellectual property pre-assembled, so we don't have to start from zero all the time," said a Fujitsu official. "The window of opportunity in the market is only several months."
Steven Myers, industry analyst at Jardine Fleming in Tokyo, said: "Neither company has tons of cash to spend on semiconductors, while both have a need to move to modern facilities." Although Fujitsu is one of Japan's top five semiconductor manufacturers, it has recently faced falling profitability in its semiconductor business as a result of reduced prices of dynamic random access memory chips or D-Rams. Sony is among the top 10 or so semiconductor manufacturers in Japan, but has been investing resources in new areas such as satellite broadcasting and digital products. Sony needs to maintain expertise in advanced technology as well as secure a source for important components. However, the risks of investing in a semiconductor facility on its own are too high. Semiconductor manufacturers have been forming joint R&D and production alliances in an effort to reduce investment risks. Fujitsu has a tie-up with AMD of the US in flash memory chips, Toshiba has an alliance with IBM in the development of memory chips. |
