The merger agreement between NEC Electronics Corp. (6723.TO) and Renesas Technology Corp. will be delayed by about a month until the end of August because due diligence work is taking longer than expected, the two firms and their parent companies said Tuesday.

The companies are conducting due diligence now on each other's global production and sales bases, they said in a joint statement without giving any further details.

The new entity, expected to begin operations in April of 2010, will become the world's third-largest semiconductor maker after Intel Corp. of the U.S. and South Korea's Samsung Electronics Co., with a combined revenue of Y1.25 trillion based on fiscal 2008 earnings.

Through the planned merger, NEC Electronics, the chip-making unit of NEC Corp. (6701.TO), and Renesas Technology, a joint venture owned by Hitachi Ltd. (6501.TO) and Mitsubishi Electric Corp. (6503.TO), aim to better compete in a global semiconductor market hit by falling prices.

-By Yuzo Yamaguchi, Dow Jones Newswires, +813 6895 7563; yuzo.yamaguchi@dowjones.com