In a bid to survive global competition in the broadband age, electronics giants Toshiba Corp. and Fujitsu Ltd. announced Wednesday they have agreed to form a comprehensive alliance to promote their semiconductor businesses.

Top executives said the tieup will have a special focus on system-on-chip technology, or advanced system LSIs — microchips made of several semiconductors that can be used in home video game consoles and cellular phones.

The two chip makers will also consider integrating their semiconductor operations, they added.

“By sharing our resources to develop and manufacture advanced semiconductors, we will try to become a global leader in this area,” said Toshiba President Tadashi Okamura.

“To survive global competition, integration (of the semiconductor business) is one possibility.”

If Toshiba and Fujitsu merge their chip-making divisions, it would create the world’s second-largest chip maker, with sales of 1 trillion yen, after Intel Corp. of the United States.

As the first step in the new partnership, the companies will set up joint teams to draw up collaboration plans by September.

The areas of focus include standardization of designs and development platforms and development of microprocessor cores and other advanced LSI chips for communications, the two companies said.

The deal comes on the heels of a similar alliance formed in March by Mitsubishi Electric Corp. and Hitachi Ltd. These two companies will set up a joint venture focused on system LSIs next year.

As information technology continues to develop, more electronic products, including mobile terminals and consumer appliances, are being digitally networked.

“To create competitive products, system-on-chip is one of the most important technologies,” said Fujitsu President Naoyuki Akikusa.

Toshiba and Fujitsu expect the partnership to help them reduce costs in developing more advanced LSI technologies and to speed up the process of bringing the devices to market, Okamura and Akikusa said.

Okamura said Toshiba will continue to maintain business alliances for developing advanced microprocessors with IBM Corp. and the Sony Corp. group.

Since the global slump in the IT sector last year, competition in the semiconductor business is intensifying. While chip makers in other Asian countries have become powerful and are able to offer lower prices, Japanese firms are cutting back on production of multipurpose DRAM chips and putting greater effort into producing advanced system LSIs, which are more profitable.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.