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TOKYO, June 12 (Reuters) - Fujitsu is keen to restart talks on merging its struggling system chip division with those of Renesas and Panasonic Corp, in a bid to confront tough global competition and preserve Japan's semiconductor industry, the Asahi newspaper reported.
Japan's chipmakers have been struggling in the face of a strong yen and fierce competition from nimbler and more aggressive competitors such as South Korea's Samsung Electronics .
Fujitsu, Renesas and Panasonic had been in discussions to combine their system LSI chip operations, but the talks stalled as Renesas grappled with mounting losses and after the February bankruptcy of DRAM chip maker Elpida Memory, the Asahi said.
Fujitsu President Masami Yamamoto told the Asahi in an interview that such a merger would only be considered if Renesas carries out an aggressive turnaround plan.
"We must keep semiconductors, which use cutting edge technology, in Japan or lose the bedrock of manufacturing," Yamamoto told the newspaper. "In order to survive, Japanese businesses must consolidate."
Renesas - itself a product of successive mergers of the chip divisions of Mitsubishi Electric Corp, Hitachi Ltd and NEC Corp - has been trying to raise more than 100 billion yen ($1.3 billion) in fresh capital and plans to cut at least 12,000 jobs, sources have told Reuters.
Renesas, the world's fifth-largest chipmaker, has struggled to revive its system-on-chip business, which makes highly customised system LSI chips that are used in a range of electronics products, including televisions made by Japan's struggling consumer electronics makers.
Japanese media reported last month that Renesas was looking to sell a chip plant in northern Japan to Taiwan Semiconductor Manufacturing Co, the world's biggest contract chipmaker.
Renesas' escalating troubles follow the massive bankruptcy in February of Elpida, Japan's last remaining maker of dynamic random access memory (DRAM) chips used in personal computers. Elpida is in talks with U.S. firm Micron Technology about a buyout plan.
Shares of Renesas shares were down 2.1 percent in morning trade, while Fujitsu slipped 1.9 percent and Panasonic dropped 3.5 percent, compared with a 1.3 percent decline in the benchmark Nikkei average.