Rohm enters OLED area, buys Oki's IC unit

Rohm Co. Ltd. has kept a relatively low profile, as compared to other chip makers in Japan, such as NEC, Sony and Toshiba.

Now, Rohm wants to share the limelight. Rohm confirmed that it has acquired the semiconductor operations of Japan's Oki Electric Industry Co. Ltd. Rohm is also making other headlines by moving into the organic electroluminescence (OLED) market.

Formed in 1958, Rohm (Kyoto) sells various types of semiconductors for use in the consumer electronics, mobile phone and network industries. The company achieved sales of 373 billion yen ($3.6 billion) in fiscal year 2008, down 5.5 percent from a year ago. Net income was 31.9 billion yen ($304.7 million) in fiscal 2008, down 3.4 percent from a year ago.

Seeking to boost its IC presence, Rohm acquired Oki's chip unit for about 100 billion yen ($959 million), as previously expected. The chip unit, Oki Semiconductor Co. Ltd., is a second-tier supplier and has reportedly been losing money. The unit has 6,000 employees.

The move will propel Rohm into new markets. Oki sells ASICs, MCUs, power management ICs, RF devices, sensors and other products. Rohm will also inherit Oki's efforts in the foundry sector. Oki has various technologies, such as high voltage processes, silicon-on-insulator (SOI) and wafer-level chip-size packaging (W-CSP).

Oki has been looking to expand its semiconductor business for some time. For its part, Rohm has been looking for more opportunities in semiconductors.

''While leveraging Oki's semiconductor fabs for products based on our advanced technologies such as low power consumption, high voltage processing, digital/analog mixed processing and small-size packaging technologies, Oki will utilize Rohm's leading-edge production processes for products such as system LSIs and logic LSIs that currently use outside fabs,'' said Naoki Sato, executive vice president at Oki, in a statement.

''With this share transfer, we can create a synergy effect to strengthen both sales and profit for the two companies by complementing each other, as the overlap of our products is relatively small,'' said Satoshi Sawamura, managing director at Rohm, in a statement. ''We will become more competitive as we expand our product line up and maximize our advanced production capabilities.''

Not to be outdone, Rohm is also moving into the OLED market. A group headed by Mitsubishi Heavy Industries Ltd. (MHI), Rohm, Toppan Printing Co. Ltd., and Mitsui & Co. Ltd. have established a venture called Lumiotec Inc.. The venture will assess the business viability of organic electroluminescence (OLED) panels for lighting applications.

The joint venture is capitalized at 1.4 billion yen ($13.4 million). MHI furnished 51 percent of the requisite capital, and the remaining equity investment was shared by Rohm (34.0 percent), Toppan Printing (9.9 percent), Mitsui (5.0 percent) and Junji Kido (0.1 percent).

Hisao Shigenaga, deputy general manager of MHI's Machinery and Steel Structures Headquarters, concurrently serves as the president of the venture, which has its head office in Yonezawa City in Yamagata Prefecture. The company will begin operations with 20 employees.