Rumor: Hitachi five Japanese manufacturers will chip joint venture

On September 11th, the Japanese electronics giant Hitachi, Toshiba, Matsushita, NEC and Renesas technology and other five companies are in talks to set up a joint venture with the production of chips, TSMC and UMC compete.

According to Taiwan media the Taipei times website reported that Japan's largest electronics manufacturer Hitachi CEO Etsuhiko Shoyama said that Hitachi is negotiating with Toshiba and other companies to set up a joint venture in order to produce chips. 'we are in negotiations, but no decision has been made so far,' he said. Toshiba spokesman Keisuke Ohmori declined to comment on the news.

Japanese Economic News reported earlier in September 10th that the joint venture will invest 300 billion yen ($2 billion 700 million) to build a factory. The factory will be put into production in 2007. However, the report did not disclose the source of the news.

Akira, a spokesman for Panasonic in Tokyo, said that while we are working with other companies in the industry to discuss some of the issues, but we did not consider the establishment of such a joint venture plan Kadota. NEC spokesman Sophie Yamamoto said that NEC did not participate in such negotiations. Renesas spokesman declined to comment on the news.

Japan's Ministry of economy and Industry under the Machinery Industry Association said in a document, the investment of $3 billion is necessary. To sell customized chips to invest at least $5 billion to recover the investment. In addition, analyst at Shinko securities in Tokyo, Japan, Yoshihide Ohtake commented that, due to the growing complexity of consumer electronics, several companies together is a good idea. However, the investment of 300 billion yen is not enough to make the plant profitable.

Japanese chip makers have lost to rivals in Asia because of their inability to compete on cost. TSMC is currently the world's largest chip foundry, UMC is the second largest chip foundry. Singapore's Chartered Semiconductor is the third largest chip foundry. Chartered spokesman Maggie Tan declined to comment on the plan of Hitachi.