Japan Backs Failure

The Japanese are back pursuing their long-time failed strategy of merging unsuccessful semiconductor businesses.

We’ve had Elpida and Renesas, the next merger being proposed is Panasonic and Fujitsu.

According to The Japan Times, Panasonic and Fujitsu will merge their ASIC businesses as from the new financial year in April.

The new company formed by the merger will get funding from the government-backed Development Bank of Japan and a new fund to be established to sponsor companies seen to have growth potential.

Both companies have sustained a long fall from grace.

In 1988, Fujitsu was No.6 in the world and Matsushita (as Panasonic was then called) was No. 9.

It was a year in which there were six Japanese companies in the top ten including Japanese companies holding the top three positions.

Last year Fujitsu was No.15 and Panasonic No.25

It’s rather unkind to say it, but the Japanese have had one successful idea in semiconductors – to copy the Americans making DRAM.

When DRAM commoditised, the Japanese had nowhere to go despite the rise of mobile.

What the Japanese semiconductor industry needs is not mergers and government funding but ideas.

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