Renesas Technology annd NEC Electronics, two of the world's largest microcontroller manufacturers, have announced their plans to merge, forming the world's largest microcontroller manufacturer.
Renesas was formed in 2003, merging the semiconductor operations at Hitachi (55%) and Mitsubishi Electric (45%). NEC Electronics was established in 2002 as a semiconductor spinoff from NEC.
The company will combine the two operating units of NEC Electronics and Renesas (Renesas includes the former Hitachi, and Mitsubishi semiconductor units). The new company will be the third-largest semiconductor manufacturer with combined sales of $12.85Billion (Intel is #1, Samsung is #2).
NEC Electronics has 22,500 employees, while Renesas has 25,000 employees. NEC Electronics' sales for their fiscal year ending March 31, 2008 was U.S. $7.13 billion, while Renesas net sales for the same fiscal year was U.S. $9.85Billion.
The surviving company will probably be NEC Electronics. This will allow the new company to maintain their listing on the Tokyo Stock Exchange (TSE).
The two companies plan to cut costs by about $1 billion each. It's expected in mergers like this that many of the employee layoffs will be from the sales force in order to reduce duplication of manpower.
The target deadline for business operations for both to merge is April 1, 2010. The ownership ratio of the integrated company, company name, headquarters location, corporate board members, and other details will be worked out within the next year.
More information will be posted when it becomes available.
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