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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