Nikon chip maker Renesas to merge with NEC Electronics

Renesas are rumored to be the makers of the CMOS imager in the Nikon D3 and D700 (pictured above)

Nikon's principal chip supplier for the full-frame 12-megapixel D3 and D700 DSLRs, Renesas Technology Corp, agreed to a merger with NEC Electronics Corp this week, prompting the DJP and likely other industry pundits to consider the implications for the company, which has seen market share improve in the influential pro-sector currently dominated by rival Canon.

Although it has never been confirmed by Nikon, it's thought Renesas fabricate the 35mm format CMOS imager that has been responsible for the turnaround in the camera makers fortunes in the ultra-competitive press and agency markets, in which the Japan based company once prevailed. Nikon UK has so far declined to comment on the news.

Source Bloomberg

NEC Electronics Corp. and Renesas Technology Corp. agreed Monday to merge in a deal that may create Japan's largest chip maker.

The terms including ownership ratio should be agreed by the end of July and the transaction completed by next April, the companies said Monday. The chip unit of NEC Corp. and Renesas, the Tokyo-based venture between Hitachi Ltd. and Mitsubishi Electric Corp., made the announcement in a joint statement with their parents.

"Nothing has been decided but because of NEC Electronics' listed status, it's likely that it will be the surviving company," NEC President Kaoru Yano told reporters in Tokyo. "We don't look at it as one company absorbing another."

NEC Electronics, the chip unit of NEC Corp. and Renesas, a semiconductor venture of Hitachi Ltd. and Mitsubishi Electric Corp., made the announcement in a joint statement with their parents to the Tokyo Stock Exchange. The combined entity would account for more than 30 percent of the $13.6 billion market for microcontrollers used in cars and consumer electronics, almost triple the market share of the nearest rival, Freescale Semiconductor Inc. The tieup may also lead to further reorganization in Japan, where five of the nation's top eight chip makers forecast losses in the last fiscal year.

"There are still a lot of unresolved issues, but the overall impression is positive," said Yukihiko Shimada, an analyst at Mitsubishi UFJ Securities Co. "It remains to be seen how the companies will deal with their overlapping production facilities and workforces," Shimada said.

Microcontrollers are minicomputers dedicated to a specific function, such as operating a liquid-crystal display in a microwave oven, cruise control in a car, or remote control for a DVD player.

Combined sales at Renesas and NEC Electronics in calendar 2008 reached $12.9 billion, exceeding $10.6 billion at Toshiba Corp.'s chip unit, Japan's largest chip maker, according to an April 16 report by Morgan Stanley.
Renesas controlled 20 percent of the market for microcontrollers in 2008, followed by NEC Electronics with 11.4 percent and Freescale with 11.2 percent, the Morgan Stanley report said.

Toshiba, the country's biggest maker of system LSI chips, may form an alliance with Fujitsu Ltd., the country's fourth-biggest manufacturer of the devices, Hideyuki Maekawa, a Tokyo-based analyst at Credit Suisse Group AG, wrote in a report dated April 16.


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