Fujitsu and Panasonic have joined forces to establish a new independent company to develop system LSI Chips for uses such as in cars and smartphones.
The two companies have signed a memorandum of understanding to consolidate the design and development functions of the system LSI businesses of Panasonic and Fujitsu Semiconductor Limited, a wholly owned subsidiary of Fujitsu.
Former Kyocera president Yasuo Nishiguchi will be CEO of the new firm.
With the backing of capital contributions from third-party investors, Fujitsu and Panasonic will establish a new company under a fabless business model, enabling LSI design and development functions.
At the same time, the two companies have agreed to discuss the transfer of business to the new company.
In establishing the new integrated company, Development Bank of Japan Inc. (DBJ) has been asked to assist with investment and financing.
Fujitsu and Panasonic are currently engaged in detailed discussions with the goal of promptly finalizing a contract.
According to a Fujitsu company statement, Fujitsu Semiconductor and Panasonic each possess advanced technologies and significant intellectual property in the field of system LSI devices, and have been supporting the products of customers both inside and outside Japan through the provision of advanced system LSI devices.
"In recent years, however, as market conditions have rapidly deteriorated and overseas semiconductor manufacturers have risen in prominence, the system LSI businesses of Fujitsu Semiconductor and Panasonic have been facing a severe business environment," the statement reads.
"In light of this situation, Fujitsu and Panasonic have both come to acknowledge that bringing together their respective advanced technologies and customer bases is vital to build a competitive business globally."
Focusing on system LSI marketing, design and development under a fabless model, Fujitsu and Panasonic aim to achieve future growth in system LSI businesses.
Fujitsu said the new integrated company plans to combine the technological prowess that both Panasonc and Fujitsu had long accumulated, while concentrating new investments on key fields to be a global top-level LSI company.
"Areas of focus include high performance solutions (high performance servers and core technologies that support Cloud infrastructure such as ultra-high-speed networks), Visual and imaging solutions (next-generation DTV, applications for image recognition) and wireless solutions (mobile and extremely low-power wireless connectivity solutions that support ubiquitous networks).
Deliberations are underway with DBJ regarding the procurement of investment funding for increasing global competitiveness in key fields.