Fujitsu to merge chip business with Panasonic, cut 5,000 jobs

Intense semiconductor competition has already forced numerous Japanese companies to work together, and now Fujitsu has announced that it'll merge its LSI chip design and R&D divisions with Panasonic. The two companies are looking to the state-run Development Bank of Japan to fund the new venture, which comes in the wake of expected Fujitsu losses of over $1 billion this year -- forcing the company to cut 5,000 jobs and transfer 4,500 to other divisions by March 31st. Fujitsu said it's also looking to transfer a state-of-the-art LSI fabrication line in central Japan to a new foundry venture with Taiwan Semiconductor Manufacturing, the world's largest chip maker. That carries on a trend in declining Japanese chip dominance, exemplified by Elpida's bankruptcy and the recent government bailout of Renesas, which itself is a merger of NEC, Hitachi and Mitsubishi's semiconductor operations.

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