Reverse Offensive: Japan’s Semiconductor

Photo by Mathew Schwartz on Unsplash
According to the Nikkei newspaper yesterday,
Renesas Electronics (Japan) will acquire Integrated Device Technology (IDT) for about 660 billion yen ($ 5.9 billion).
This movement seems to be one step for Japanese semiconductor companies to recover their competitiveness.
■ Renesas Electronics
Renesas was born in 2010 when Renesas Technology integrated with NEC Electronics, Mitsubishi Electric and semiconductor division of Hitachi merged in 2010.
The specialty of this company is semiconductor which is responsible for the brains of cars and home appliances.
In addition, this company occupies the world leader in automotive microcomputers. This time, it added to the nervous system which exchanges data at high speed, it got in a position to line up with the biggest in the world.
By the way, Hitachi ‘s technical development department’ s office is on the same floor as our corporate headquarters. The building is the same.
I face everyday with intellectual engineers in hallways and elevators.
To date, Japanese semiconductor manufacturers have added value in the manufacturing department by making use of microfabrication technology and others. However, manufacturers who specialize in semiconductor manufacturing are emerging and losing their strength is the real situation.
From now on, they will incorporate IDTs from fabless companies that do not have factories, raise their design and development capabilities, and make reversal attacks.
In the semiconductor market where growth continues, the automotive field is a promising field.
According to the British research company IHS Markit, “Level 3" automatic driving vehicles whose persons are not involved in driving in principle will carry more than three times the semiconductor of gasoline-powered vehicles.
Future plans will increase the number of semiconductors such as microcomputers that play the nervous system, communication semiconductors, and sensors that carry “eyes”.
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· NVIDIA
The presence in this automotive semiconductor field is increasing.
Drive the market with semiconductors that are superior in image recognition for grasping pedestrians and surrounding conditions.
The company has no factory, it is a fabless company specialized in design and development.
· British Arm · Holdings
The Softbank Group (SVF) bought it for about 3.3 trillion yen ($ 29.7 billion) in 2016.
This company is also a company specialized in designing semiconductors for smartphones and “IoT” where everything is connected to the net.
· Mobile Eye
Intel, which boasts overwhelming market share in the field of personal computer semiconductors, bought Israeli startup mobile eye for about $ 15 billion (about 1.65 trillion yen) in 2017.
Intel aims to get over by capturing Mobile Eye, an influential fabless company.
· US Freescale · Semiconductor
NXP Semiconductors of the Netherlands bought Freescale Semiconductor in the United States and emerged as the leader in automotive semiconductors.
■ Characteristics of fabless companies
Fabless companies are excellent in development capabilities and boast of high profitability.
IDT’s gross profit margin (gross margin) exceeds 50% Renesas’ medium-term target.
From now on, Renesas Electronics is the key to extending its business partners, such as robotics and IoT, in addition to automobile manufacturers. Other Japanese companies may have realized the current sense of crisis.
I hope that further consolidation will proceed globally.
