Semiconductor chip manufacturer, NEC Electronics has announced its plans to reorganize manufacturing facilities in Japan and combine its six units in to three core business units to cut costs and break even at the operating level by March 2008.
The company announced the merger of it three units, NEC Kyushu, NEC Yamaguchi, and NEC Semiconductor Package solutions to focus on micro-controllers. The NEC Kansai and NEC Fukui unit will concentrate on discrete chips after integration while the production line at Sagamihara plant will be transferred to the company’s manufacturing facility at NEC Yamagata. The merger of the units is expected to close in April 2008.
The unit at NEC Yamagata will be developed as a centralized R&D centre to enable mass production. The facility at Yamagata has a capacity to produce 13,000 wafers of 300mm a month.
The consolidation plan was considered after the unit of NEC posted its second straight operating loss in March 2007 because of falling chip prices and rising R&D expenditure, Reuters has reported. Earlier this year, the company announced to cut its domestic front-end production lines to four by the end of March 2010 from nine at present.
The company is attempting to focus on limited products such as chips for cars such as Toyota’s Lexus luxury car and Nintendo’s Wii console and liquid crystal display. To reduce manufacturing and development costs, the company announced collaboration with Toshiba in November 2007, to develop 32nm chips.
Source: ComputerWire daily updates