Japanese electronics giants Hitachi and Mitsubishi Electric Corp. plan to merge the bulk of their semiconductor chip operations under a joint venture to boost profitability. Sales of chips to the auto industry are seen as an important part of the strategy.
The two companies have said that they plan to set up a joint venture in about a year to integrate their system LSI business, aiming to become the world’s top supplier in that field.
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System LSI is a relatively sophisticated semiconductor type used in a wide range of digital appliances – and increasingly in telematics applications in the auto industry. It is much more profitable than simpler chips called DRAM, or dynamic random access memory. DRAM chips have been at the centre of intense price competition among its mainly Asian manufacturers.
Details of the agreement are still being worked out, the companies said.
