It should come as no surprise that many Japanese electronics firms have battled poor operating margins in their semiconductor divisions in recent years. In the last two years many of the larger firms had decided to increase capital expenditures that focused on 300mm fabs in a bid to regain lost competitiveness due to consistent under investment in the last ten years.

Currently, Japan is home to 14 planned or operational 300mm fabs, that represents 23 percent of all 300mm fabs in the world to date. However, the combination of operating costs and fierce competition from other IDM's and fables companies has seen many Japanese firms struggle to regain margins to justify continued capital investments.

This is not the first time that Japanese firms have sought to consolidate chip manufacturing into a new entity. Most recently, Elpida was established and subsequently spun-off to handle the DRAM manufacturing needs and requirements of its former owners, (Hitachi & NEC).

It is therefore quite possible that the outcome of proposed study would lead to a new dedicated foundry to handle the groups advanced chip requirements. Rather than build a new 300mm fab to accommodate the required capacity it would also seem logical that existing under utilised 300mm facilities would be used and re-named.

The hopes these Japanese companies and others had—only a few years ago to regain a competitive edge—seem to be waning fast.