Feb. 18, 2008 – Powerchip Semiconductor, Renesas, and Sharp have formed a design house in Japan for small and medium-sized LCD panel driver chips.

Renesas SP Drivers, capitalized at ¥5B (US ~$46M), will be majority owned by Renesas (55%), with Sharp (25%) and Powerchip (20%) minority owners, and consist of about 150 workers from Renesas and 20 from Sharp. LCD drivers and controllers will be made at a Renesas factory in Ibaraki Prefecture, with some work contracted out to Powerchip, noted the Nikkei daily.

Headquartered at a Renesas factory in Tokyo, the venture will take in 150 people from Renesas and 20 from Sharp. The companies indicated in statements that Powerchip would handle most of the actual production, though the Nikkei daily noted that some LCD drivers and controllers will be made at a Renesas factory in Ibaraki Prefecture and contract out some production to Powerchip. The joint venture will gradually take over sales as well.

Driving the need to form the partnership, according to the companies in a statement, is the emergence of higher-functionality mobile phones with digital cameras and even TV reception, and increasing demand for phones in emerging markets such as the BRICs economies, notably China and India, all of which “generate heavy demand for integration of driver and controller functions for small- and mid-size LCDs.” Further, they cited “increasingly fierce” market and price competition, including from overseas fabless companies.

For Powerchip, the venture is another foothold in the LCD driver IC sector, notes the Taiwan Economic News, adding to the company’s ILI Technology business, which counts Hon Hai Group as a customer (since it receives investment from affiliate Innolux Display). The paper noted that LCD ICs are a major part of Powerchip’s total 40K WPM 200mm fab output,