NEC, Renesas combine will outsource chip production

NEC Electronics will merge with giant Renesas next April but already there’s plans to outsource more and more semiconductor production.

That emerged from an interview in the Wall Street Journal with NEC Electronics president Junshi Yamaguchi.

He told the newspaper that outsourcing semiconductors helped buffer big companies from big drops in demand, typified by what happened when the credit crunch hit last year.

NEC has already declared that it will outsource some semiconductors to Japanese DRAM company Elpida, but such plans are likely to accelerate in the future.

There is a number of so-called “pure play” foundries such as Taiwanese companies TMSC and UMC only too happy to take designs from big companies like NEC and print their chips for them.

But that doesn’t mean that NEC will shut down its own fabs – it will carry on making semiconductors for cars.

The trend towards hybrid cars will aid NEC-Renesas in the future because on average such vehicles use as many as 50 percent more semiconductors than gas fuelled cars, he told the Journal, here.  (subscription required)