Despite negotiations being put on hold due to financial difficulties faced by Renesas Electronics Corp., Fujitsu Ltd. is still considering integrating its system LSI chip operations with the troubled electronics firm.
Fujitsu said it will wait until Renesas completes its downsizing measures.
Fujitsu and Panasonic Corp. had been in discussions with Renesas about an integration plan that would have established a new company combining the design and development divisions for system LSI chips of the three companies.
Other measures in the integration plan would have included a reduction in plants and personnel to make the new venture more profitable.
However, those negotiations were put on hold, not only because of the business difficulties faced by Renesas, but also because of the bankruptcy proceedings of Elpida Memory Inc., the world's third-largest maker of dynamic random access memory chips.
Elpida has effectively been acquired by U.S.-based Micron Technology Inc., and Renesas is also moving to strengthen its business ties with a company in Taiwan.
"Unless we retain the advanced technology of semiconductors in Japan, we will lose the roots of our manufacturing structure," Masami Yamamoto, Fujitsu's president, told The Asahi Shimbun in a recent interview. "To survive, we will have to integrate the operations (of the Japanese companies)."
While system LSI chips are used in home appliances and digital equipment, a strong yen and slow sales at Japanese electronic equipment manufacturers, which are the main buyers of those chips, have led to operating losses for the fiscal year that ended in March for Fujitsu, Panasonic and Renesas.
Although Renesas has been generating profits through its microcontroller product operations, the money-losing system LSI chip operations have eaten into those earnings.
Renesas could become a profitable company if it is able to separate its system LSI chip operations to another venture.
Since 2009, Fujitsu has reduced its workforce in its system LSI chip operations by 2,000 employees, and this fall it is planning to sell its Iwate Prefecture plant that was once its main system LSI chip plant.
Yamamoto indicated he was eager to resume discussions on integrating system LSI chip operations at the three companies once Renesas goes ahead with its downsizing measures.
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