Electronics giants in merger frenzy

NEC Electronics to merge with Renesas and Hitachi to re-absorb standalone communications arm

Done deal: NEC Electronics and Renesas want to take the semiconductor market by storm

NEC Electronics and Renesas Technology are to merge and aim to become one of the world's top semiconductor manufacturers, while Hitachi is to reintegrate its communications arm.

NEC Electronics and Renesas, which is a joint venture between Mitsubishi and Hitachi, plan to sign an integration agreement in July. The deal should reach completion in about a year's time and the two firms claim it will create the world's third largest chip maker.

The combined company will have almost 50,000 employees and revenue of about 1.6 trillion yen (£11.6bn). The new firm's name, headquarters, board line-up and financial forecasts are to be decided in due course.

Hitachi is also to dissolve its standalone subsidiary Hitachi Communications Technologies and swallow its operations into the wider group. The merger was agreed today and will take effect at the start of July.

Under various names, the Japanese electronics giant has had a free-standing telecommunications business for 45 years. The current incarnation accounts for just over one per cent of total company revenue. Hitachi claims the development of IP-based communications kit prompted it to instigate closer collaboration between computing and communications technologies.