Fujitsu Ltd and Panasonic Corp. have disclosed plans to combine their system large-scale integration (LSI) chip design and development into a new company in the next fiscal year. The two companies expect the state-run Development Bank of Japan to fund the joint venture. The news comes hot on the heels of expected Fujitsu losses of over $1 billion this year. The company may cut 5,000 jobs and transfer 4,500 to other divisions by March 31, 2013, said a report by Reuters.
The new company will reportedly negotiate to receive a capital injection from the government-backed Development Bank of Japan. Renesas Electronics was part of the talks since 2012. However, its absence from the merger “suggests a rift developed over the terms of the integration,” a media report said.
The two companies said, “In recent years, however, as market conditions have rapidly deteriorated and overseas semiconductor manufacturers have risen in prominence, the system LSI [large scale integration] businesses of Fujitsu Semiconductor and Panasonic have been facing a severe business environment. In light of this situation, Fujitsu and Panasonic have both come to acknowledge that bringing together their respective advanced technologies and customer base is vital to build a competitive business globally.”
It is being reported that the new venture’s main focus will be designing chips for high performance servers, image processing and wireless networks.
