Fujitsu To Spin Off Semiconductor Subsidiary

In the latest restructuring in Japan's IC industry, Fujitsu Ltd. plans to spin-off its loss-ridden semiconductor unit. The company will also transfer its advanced process and product efforts to a new site and take a $93.6 million charge.

Fujitsu (Tokyo) said that it will form a new chip subsidiary in March. As part of Fujitsu's initiative to reform its LSI business, advanced process technology and product development for the 90-nm node and beyond--which has thus far been conducted at the Akiruno Technology Center (Akiruno TC) in western Tokyo--will be transferred to the company's 300-mm Mie plant.

Standard logic LSIs prior to the 130-nm node are manufactured on 150- and 200-mm wafer lines at fabs located at Fujitsu's Aizu-Wakamatsu plant, Iwate plant, and Mie plant in Japan.

Advanced logic LSIs for the 90-nm node and beyond are manufactured on 300-mm wafer lines at the company's other Mie plant. The fab is located in Mie prefecture of central Japan.

Fujitsu plans to continue to utilize Akiruno TC. But in regard to costs that will be incurred for equipment transfer to the Mie plant and other costs, Fujitsu estimates that incurred costs will be approximately 10 billion yen ($93.6 million).

Transfer of manufacturing equipment to the Mie plant is scheduled for March 2008. 45-nm generation process technology development is currently being shifted to the Mie plant. That is scheduled to be completed within the first half of fiscal year 2008 (April-September 2008).

Leveraging this consolidation, Fujitsu said it will accelerate development of process technologies for the 45-nm node and beyond.

The spin-off is scheduled to be implemented in March 2008. "Details regarding the new subsidiary to be established as a result of the spin-off are currently under consideration, and are scheduled to be announced when available,'' according to Fujitsu.

''The new subsidiary will enable Fujitsu to accelerate the growth of and intensify its focus on its ASSP business in addition to its ASIC business, while moving forward with business development offering greater speed and flexibility that are characteristic of the LSI industry,'' according to the firm.

In November, Fujitsu reported consolidated net sales of 2,513.1 billion yen (approximately US$21.853 billion) for the first half of fiscal 2007, an increase of 6.4 percent over the first half of fiscal 2006 and a record on a half-year basis. Fujitsu recorded a first-half consolidated net loss of 9.3 billion yen ($81 million).

After posting an operating loss in the first quarter, the company's chip segment swung back to profitability in the second quarter.

Net sales in the company's Device Solutions segment increased 5.6 percent over the first half of fiscal 2006, to 397.9 billion yen ($3,460 million). Sales in Japan rose by 21.2 percent, according to the firm.

Overseas sales declined by 15.3 percent, primarily reflecting the realignment in the company's sales organization for flash memory chips used in mobile phones. Operating income for the segment declined sharply, to 6.1 billion yen ($53 million).