Renesas Electronics, the proposed merger of semiconductor businesses of Renesas and NEC, is aiming for ‘a leadership’ position in the semiconductor rankings.
The merger, which has been agreed but which will not become reality until next April, will create a semiconductor business with sales of around $12bn.
This will make it the third largest chip company behind Intel and Samsung.
But Renesas will become the largest semiconductor company without a volume memory chip business. Both Intel and Samsung have big memory chip businesses.
“This is the best chance we have to create the leading non-memory semiconductor company,” said Matthew Trowbridge, currently chairman of Renesas Technology Europe.
Trowbridge compares the merged business to Texas Instruments, STMicroelectronics and Toshiba, all with lower sales revenues.
Trowbridge said the merger will give the company the financial resources and business momentum to move to a higher level.
“The cash injection from the parents will restore health to the balance sheet which was caused by the market downturn in Q4 2008,” said Trowbridge.
“The combined entity has a real momentum. It is now up to the management to take it forward,” said Trowbridge.
Increasing sales outside of the Japanese market will be a plan for the merged company.
Currently less than half of sales come from non-Japanese markets. The aim is to increase overseas sales to 60% within three to five years.
China and other Asian markets are key targets.
“Clearly this is an area where we will see growth,” said Trowbridge.
Microcontrollers will make up 40% of sales for the merged business and both Renesas and NEC has established product lines.
Trowbridge said there was a commitment to continue to supports all products lines.
He pointed out that the situation on MCUs is very similar to that when Hitachi and Mitsubishi merged to form Renesas in 2003.
“That model was a good one and we have maintained market share throughout,” said Trowbridge.
With NEC’s process alliance with IBM and the recent announcement that Renesas was continuing to work with Panasonic on process technology for the 28nm process node, it seems that no decision has been made on a common 28nm process technology for the merged company.
“It was important that we did not wait to ramp up the 28nm pilot process,” said Trowbridge.
But a decision on which 28nm process will be used for full production “has not been made,” said Trowbridge.
See: Renesas retains Panasonic 28nm process alliance