Fujitsu, Renesas in talks with TSMC to sell chip plants-Nikkei

July 27 Thu Jul 26, 2012 2:36pm EDT

July 27 (Reuters) - Fujitsu Ltd is in talks to sell its main semiconductor plant to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC) , the Nikkei reported.

The plant in Japan's Mie Prefecture makes image-processing chips for cameras and number-crunching chips for super computers. Fujitsu has requested TSMC to retain the nearly 1,400 employees at the plant, the business daily said.

In May, Reuters had reported that Renesas Electronics Corp would outsource the production of its top-end chips to TSMC.

Nikkei said on Friday that Renesas is also in talks to sell its system chip plant to TSMC. Both Fujitsu and Renesas aim to complete negotiations by the year-end, the daily reported.

After selling off their cutting-edge chip production plants, Fujitsu and Renesas plan to spin off their design departments and merge them with that of Panasonic Corp, the Nikkei said.

The trio will transfer about 5,000 engineers to the new firm, which will design and develop system chips for industrial equipment, automobiles and smartphones, the paper said.

The production of most of these chips will be outsourced to TSMC, the Japanese daily said.

In February, Reuters had reported that Fujitsu, Renesas and Panasonic could merge their chip development operations and outsource production to TSMC's competitor GlobalFoundries. (Reporting by Neha Alawadhi in Bangalore; Editing by Sreejiraj Eluvangal)

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