NEC Electronics to pick Toshiba or Panasonic as chip business partner+

TOKYO, July 2 Kyodo -
NEC Electronics Corp. President Junshi Yamaguchi indicated Thursday that his
company, after inking an integration contract with fellow chipmaker Renesas
Technology Corp., is eyeing either Toshiba Corp. or Panasonic Corp. as its
partner in developing an advanced semiconductor system.

''We are set to hold discussions on how to consolidate the process development
after inking the contract for our integration since it would be odd to have two
kinds of development,'' Yamaguchi said in an interview with Kyodo News.
NEC Electronics and Renesas Technology are set to sign their contract at the
end of July, with an eye to integrating their operations by April 1, 2010.
The deal between Renesas, Japan's No. 2 semiconductor maker, and third-ranked
NEC Electronics is set to create the world's No. 3 chipmaker, behind Intel
Corp. of the United States and Samsung Electronics Co. of South Korea.
In terms of developing the state-of-the-art LSI system, NEC Electronics, a chip
unit of NEC Corp., has Toshiba as its partner, while Renesas, a joint venture
between Hitachi Ltd. and Mitsubishi Electric Corp., has teamed up with
Panasonic.
Yamaguchi said that since the development NEC Electronics is pursuing and that
of Renesas overlap in certain areas, he does not see the need to maintain both
undertakings.
On the envisioned integration, Yamaguchi declined to disclose further details,
including the new entity's integration ratio.
He also vowed to return the company's earnings to the black for the current
fiscal year through next March and said the firm will continue to draw strength
from providing chips to cars amid the growing popularity of hybrid cars and
electric vehicles.
Amid a severe global slump caused by stagnant demand and erosion of chip
prices, the company posted a group net loss of 82.6 billion yen for the
business year that ended in March, which is bigger than that of the previous
year's group net loss of about 16 billion yen.
==Kyodo