Japanese firms team up on smartphone chips

Japanese handset makers NEC and Fujitsu have joined forces with the country’s market leading operator NTT Docomo to set up a joint venture to develop LTE smartphone chipsets.

The firms have collaborated closely in the past and had even attempted to launch a similar JV, with the participation of Samsung and Panasonic. According to Malik Saadi, principal analyst at Informa Telecoms & Media, that venture fell flat, primarily because Samsung’s scope was broader than its counterparts’.

“That JV was cancelled in April 2012 because NTT Docomo, NEC and Fujitsu’s main market was Japan, so they were only interested in supporting the LTE spectrum bands available in Japan with their chipsets,” he explained. “Samsung wanted to create chipsets that take advantage of economies of scale, and support a wide number of bands, but NTT Docomo was not willing to do that.”

He added that this new JV will be predominantly focused on the Japanese market, and will enable the firms to bring out chipsets for lower costs and a quicker time to market than what other chipset vendors, such as Qualcomm, with its chipsets that support many spectrum bands, would be able to.

Fujitsu will have the controlling stake of the firm with a 52.8 per cent ownership, while NTT Docomo and NEC will own 19.9 per cent and 17.8 per cent respectively. Fujitsu’s chip making business, Fujitsu semiconductor, will own 9.5 per cent. Between them, the firms have put up 100m yen ($1.28m) in capital to begin the JV, which will have approximately 85 staff at launch.