Date: 08/02/2013

Fujitsu cut, trim, align its semiconductor business with the help of Panasonic

When its comes to semiconductor technology, Japan takes big share in all aspects, the 2nd biggest in the world in most of the segments of the chip business. However due to stiff competition from other Asian regions, mainly Taiwan, South Korea and China and also due to natural disaster in 2011, Japan's semiconductor industry is hurt by lack of sales and huge manufacturing infrastructure exceeding what Japan' electronics industry need at this time. There is no point in keeping any semiconductor fabs making chips above 90nm unless there is a local demand. All this necessiates Japanese semiconductor companies to get rid of unwanted mass/burden. They started becoming light/lite, but that costs resulting in losses to big companies. Though painfull for one/two years, the restructuring can result in positive growth.

The latest example is Fujitsu Semiconductor. Fujitsu makes broad range of chips from Anlog to Power ICs to SoCs. Below are restructure announcements made by Fujitsu:

As a result of these decisions, the scale of Fujitsu's system LSI business will expand and be operated as an independent company. Fujitsu is considering numerous options with the aim of offering a stable supply of products to customers through its microcontroller and analog device businesses. After taking into account impairment on fixed assets due to further restructuring, Fujitsu Semiconductor's 150mm/200mm wafer lines, where improvements to capacity utilization rates are vital, will be consolidated in Japan's Aizu-Wakamatsu region. In so doing, Fujitsu aims to streamline production capabilities and rationalize personnel resources to achieve a more compact organization with stable business operations.


Fujitsu has decided to establish a new fabless company with the integration of Fujitsu Semiconductor's system LSI business with that of Panasonic Corporation. Fujitsu and Panasonic have come to a basic agreement to establish a new fabless company, in which capital participation from outside investors will be accepted. The new company will consolidate design and development of system LSI through the transfer of design and development capabilities of each of Fujitsu Semiconductor's and Panasonic's system LSI businesses. In establishing the new integrated company, Development Bank of Japan Inc. (DBJ) has been asked to assist with investment and financing. The new company to provide solutions in high performance, imaging and wireless fields.

Transferring the 300mm Line of the Mie Plant: Transfer of 300mm line to a new foundry company including TSMC.

Microcontroller and Analog Device Business: Fujitsu Semiconductor supply general-purpose MCUs for automobiles, industry, and consumer electronic areas in the microcontroller and analog device business. Fujitsu Semiconductor says it aims to offer a stable supply to its customers and develop its business, and is taking a close look at an entire range of possibilities.

Fujitsu Semiconductor's New Direction after Restructuring: After integration of the system LSI business to establish a new company as well as the transfer of the 300mm line of the Mie Plant, which are initiatives now under consideration, Fujitsu Semiconductor's manufacturing facilities will consist primarily of the 200mm line in Mie, the 150mm line in Aizu-Wakamatsu and the 200mm line of Fujitsu Semiconductor Technology (FSET). The decision on the policy to implement this restructuring will be the basis for impairment on fixed assets. In so doing, production and human resources can be rationalized to improve capacity utilization and lead to stable management.

Staff cut: Approximately 2,000 people throughout the Fujitsu Semiconductor group will come under the scope of rationalization.

Loss: Fujitsu said it has factored in an extraordinary loss of 57.0 billion yen in its fiscal 2012 third quarter. In the fourth quarter as well, to continue structural reforms of the semiconductor business, Fujitsu Semiconductor may undergo additional impairments.
Author: Srinivasa Reddy N