JOINT VENTURES SOUGHT FOR FUJITSU CHIP UNIT

Tokyo
Financial Chronicle

Fujitsu’s microchip unit said Wednesday that it was in talks with other chip makers at home and abroad on potential alliances ranging from joint development of advanced chips to integration of operations.

Fujitsu Microelectronics also said that its earnings targets for the year to March 2009 looked challenging because of tough business conditions like higher raw materials prices and earthquake damage to one of its plants.

Fujitsu Microelectronics was established in March after the computer and computer services firm Fujitsu made its struggling microchip operations a separate entity.

‘‘From co-development to business integration, there are some potential ways for us to go,’’ Fujitsu Microelectronics’ president, Haruki Okada, said in an interview. ‘‘We are keeping the door open on all options and our talks have not got into specifics yet.’’ Matsushita Electric Industrial, the maker of Panasonic brand products, has allied with the unlisted company Renesas, while NEC Electronics has teamed up with Toshiba to develop more powerful chips with finer circuitry.

Narrower circuitrymakes the size of a chip smaller and helps manufacturers cut per-chip production costs.

But finer circuitry also means heavier initial investment, prompting microchip makers worldwide to join hands.

Okada said he aimed to reach a preliminary decision on potential alliances by March. ‘‘You might wonder what’s keeping us from a quicker decision,’’ he said.