Dec. 27, 2002 – Tokyo, Japan – Hitachi Ltd. and Mitsubishi Electric Corp. said they would merge their domestic semiconductor sales subsidiaries into a new company in April.

This announcement follows a basic agreement, which the electronics makers announced in October, to create a joint venture, Renesas Technology Corp., on Apr. 1 by merging most of their chip operations, reported Dow Jones.

The two companies have formally signed a contract to establish the joint venture with capital of 50 billion yen. Hitachi will take a majority 55% stake in Renesas Technology, and Mitsubishi Electric the remaining 45%.

The pair will merge their whollyowned domestic chip sales operations units – Hitachi Semiconductor and Devices Sales Co. and Mitsubishi Electric Semiconductor Systems Corp. – and set up a new entity, Renesas Technology Sales Co., capitalized at 2.5 billion yen.

Renesas Technology Corp. will take a 100% stake in the new sales company, the comapnies said.

Hitachi and Mitsubishi also plan to consolidate their overseas sales bases in the US, Europe, and Asia in the first half of the fiscal year starting April. With 27,200 workers on a group basis, Renesas Technology will aim to post profit in its first business year, and group sales of more than 900 billion yen.