Renesas talking with foreign firms about sale of mobile phone chip unit
TOKYO (Reuters) - Japan's Renesas Electronics Corp is in talks with foreign companies about selling the mobile phone chip business it bought from Nokia Oyj three years ago, the company's new president said.
"It is one of the options we are looking at," Tetsuya Tsurumaru, the Japanese chipmaker's latest boss told reporters in Tokyo on Thursday. Tsurumaru took over as president on Feb 22.
"Overseas is our main focus," Tsurumaru said, without identifying the firms his company was speaking to. A sale in Japan remained a possibility, he added, but declined to discuss whether any talks about a domestic deal were underway.
Purchased in 2010 for $1.9 billion, the cellphone chip unit has been in the red ever since, contributing to losses that forced the company to seek a $1.6 billion government-led bailout cobbled together in December to counter a bid by U.S. private equity firm KKR & Co LP amid worries that Renesas' technology would end up in foreign hands.
Separately, in October it received $1 billion from its banks and main shareholders Hitachi Ltd, NEC Corp and Mitsubishi Electric Corp.
The world's leading maker of microcontroller chips used in cars will receive its state financing by the end of September, at which point it will be two-thirds owned by the taxpayer-funded Innovation Network Corp of Japan (INCJ).
Renesas had been expected to join an all-Japanese merger of Panasonic Corp's and Fujitsu Ltd's LSI chip units, which make microchips used in TVs, digital cameras and other consumer electronic products, sources told Reuters last month. The firm is still in talks about joining its domestic rivals, those sources said.
In February, Renesas, which last year slashed more than 7,000 jobs and promised to shutter eight of its 18 plants in Japan within three years, cut its earnings forecast for the year to March 2013 to an operating loss of 26 billion yen ($272.24 million) from its previous forecast of a 21 billion yen profit.
($1 = 95.5050 Japanese yen)
(Reporting by Tim Kelly and Maki Shiraki; Editing by Daniel Magnowski)