Hitachi and Mitsubishi to Integrate Chip Business

October 06, 2002 by Jeff Shepard

Hitachi Ltd. (Japan) and Mitsubishi Electric Corp. (Japan) announced that they will merge several of their semiconductor operations into a new company in an attempt to boost profitability. The new company, Renesas Technology Corp., will be formed in April 2003.

Renesas will be capitalized at 50 billion yen ($409.84 million), with Hitachi contributing 55 percent and Mitsubishi 45 percent. Renesas will have 27,200 workers and is expected to earn at least 900 billion yen ($7.38 billion) in its first year. One of the key operations being merged is the production of "system large-scale integrated" or LSI circuits, a kind of semiconductor used in mobile phones and digital appliances.