Source: Xinhua

02-01-2009 10:18

TOKYO, Jan. 30 (Xinhua) -- Toshiba Corp. and NEC Corp. have begun talks to integrate their troubling semiconductor operations to combat plummeting chip prices and dwindling global demand, local media reported Friday.

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Fujitsu Ltd. may also participate in the deal in the future since it is also looking for a tie-up partner for its semiconductor unit, which was spun off in March last year, Kyodo News said, citing sources familiar with the matter.

Industry insiders believe if the three-way integration realized, it is likely to trigger a major realignment in the semiconductor industry.

The talks between Toshiba and NEC are also likely to involve integrating Toshiba's system LSI operations with NEC Electronics Corp., a major chip-making subsidiary of NEC, the sources said.

Toshiba and NEC have already formed an alliance to jointly develop a cutting-edge system LSI.

Toshiba, the world's No. 2 maker of NAND flash memory, and other major chip-making companies throughout the industry have been reeling under a global industry-wide slump caused mainly by the spreading global recession.

On Thursday, Toshiba said it expects a group largest-ever net and operating loss of 280 billion yen (about 3.09764 billion U.S. dollars) for fiscal 2008, its first red-ink in seven years.

Editor:Yang Jie