INTERVIEW-NEC Electronics, Renesas both to keep 300-mm plants

KAWASAKI, Japan, July 2 (Reuters) - NEC Electronics Corp (6723.T) (6723.T) and Renesas Technology Corp will both keep their advanced 300-mm plants after they merge, the newly appointed president of NEC Electronics said.

The two loss-making chipmakers announced plans to merge their operations to survive and grow as sales fall faster than their ability to cut costs, denting their ability to invest in new technologies.

The merged entity does not need to choose between NEC Electronics's Yamagata factory in northern Japan and Renesas's plant in Hitachinaka outside Tokyo, NEC Electronics President Junshi Yamaguchi said in an interview on Thursday.

"In principle, both will remain," Yamaguchi said, adding that the usage rates for both were rising. "Using these advanced lines more will actually reduce costs."

NEC Electronics, Japan's fourth-largest chip maker, faces its fifth straight year of losses, and hopes the merger will help it streamline product lineup and slash development and design costs.

Product overlap at the two chip makers was probably about 20 percent to 30 percent now, Yamaguchi said.

The two companies are expected to merge next April.

(Reporting by Mayumi Negishi)

((mayumi.negishi@thomsonreuters.com; +81-3-6441-1812; Reuters Messaging: mayumi.negishi.reuters.com@reuters.net))

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