Japanese chipmakers contemplate massive consolidation

Will Japanese semiconductor companies form a massive new memory IC

conglomerate? Last month, Hitachi and Mitsubishi said they would merge the bulk

of their semiconductor operations. Now, reports have it that NEC and Matsushita

may joint the join venture in what would create a huge new semiconductor

conglomerate.

The move comes in reaction to the expected merger of Micron and Hynix, which

will create the world's largest memory IC producer. Apparently the Japanese

companies are feeling compelled to counter the Micron move in order to remain

competitive in the battle for economies of scale.

Also helping push the Japanese companies into a joint venture is the dire

conditions of the Japanese economy and the lack of resources to invest in

expensive new IC research, plants and equipment. Meanwhile Fujitsu is also in

talks with Toshiba about possible co-operation in semiconductors.