Fujitsu announces restructuring and new direction of its semiconductor business

JAPAN: Fujitsu Ltd and Fujitsu Semiconductor Ltd announced the restructuring and new direction of their semiconductor business.

Restructuring and new direction of semiconductor business
Since fiscal 2009, Fujitsu and Fujitsu Semiconductor have advanced their semiconductor business in accordance with a proprietary "fab-lite" business model. Since fiscal 2011, however, this business has been confronted with an extraordinarily difficult operating environment as sales declined due to fast-deteriorating market conditions and an increasingly severe competitive climate.

In response, the companies accelerated the fab-lite strategy, starting with the transfer of ownership of Fujitsu Semiconductor's Iwate Plant and LSI assembly and test facilities. Seeking to further develop their semiconductor business, and to build a more robust foundation for business based on their portfolio of technologies, Fujitsu and Fujitsu Semiconductor have considered a variety of options, including talks with outside companies.

Today, Fujitsu and Fujitsu Semiconductor have decided to establish a new fabless company with the integration of Fujitsu Semiconductor's system LSI business with that of Panasonic Corp. Another initiative is the deliberation on the transfer of the Mie Plant to a new foundry company, including Taiwan Semiconductor Manufacturing Company Ltd (TSMC). The decision has been made to move forward on planning to establish a new foundry company, to which Fujitsu Semiconductor's Mie Plant is to be transferred.

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.