The financial bloodletting has continued even as manufacturers have had to lay out billions to advance into new generations of DRAMs and to build plants capable of making wafers with even thinner line widths. Normally, they can rely on such transitions to make fat profits. But many others are getting out of DRAM production altogether to focus on more profitable semiconductors, such as specialty chips used for cellular phones and digital cameras. As part of the deal, Mitsubishi will have Powerchip and Vanguard make its memory chips. That will let Mitsubishi shift to higher-end chips.
More deals are likely.
Nomura Securities International Inc. Signs indicate that consolidation is spreading to other segments of high-tech electronics. A number of Japanese companies are teaming up to develop new computer-display panels, where risk and capital costs also are high. Fujitsu and Hitachi agreed in April to work on large-screen plasma displays, while Toshiba and Canon are joining forces to develop a new flat panel. Some analysts see these moves as the precursor of wholesale restructuring of Japan's electronics behemoths. It has taken the worst economic crisis of the postwar era, but the time when Asian conglomerates prized bulk over profits may be drawing to a close.