Fujitsu Ltd. said Thursday it will eliminate 5,000 jobs and merge its LSI chip business with that of Panasonic Corp. to boost global competitiveness.

The venture will design large-scale integrated, or LSI, chips and contract out their manufacture, according to a joint statement by the companies. The government-backed Development Bank of Japan has been asked to help finance the venture, they said.

Fujitsu, Japan’s biggest software services provider for companies, will take ¥112 billion in charges combined in the two quarters ending March 31 for the restructuring and will also transfer 4,500 workers at the chip unit.

Funding by the DBJ will come after government-backed funds have invested in struggling chip-maker Renesas Electronics Corp. and a liquid crystal display venture formed by Sony Corp., Hitachi Ltd. and Toshiba Corp.

Under the plan, Fujitsu may move a production line in Mie Prefecture to a new chip foundry.

Fujitsu said it expects a net loss of ¥95 billion in the year ending March 31, compared with a previous forecast for net income of ¥25 billion, it said Thursday.

Panasonic, which is scheduled to announce a midterm plan by the end of next month, is restructuring as it heads toward a second straight annual loss. The company has eliminated more than 38,000 jobs since April, halted smartphone sales in Europe and closed plants making lithium-ion power cells.

Renesas Electronics Corp. is not involved in the latest merger due to discrepancies over the terms of the operations merger.

Via: http://www.japantimes.co.jp/news/2013/02/08/business/fujitsu-to-ax-5000-jobs-in-merging-lsi-chip-business-with-panasonics/