Renesas shares plummet -

Renasas has seen a fall in its stock price following its announcement that it plans to axe at least 12,000 jobs and get rid of operations that are costing it money.

Shares fell by 11 percent this morning following the announcements last week, which are thought to be a domino effect from the February bankruptcy filing of Elpida Memory. The company is also reportedly unable to keep up with competition from rivals such as Samsung.

In a bid to try and stay afloat the company announced its restructuring plan, which as well as the job cuts would see the company moving to raise $1.26 billion (100 billion yen).

It will also move to strengthen its position further by teaming up with Taiwan Semiconductor Manufacturing Company, which sources say will probably involve an outsourcing deal as well as flogging it a chip plant in northern Japan.

However, currently the plans are just talk, with sources telling Reuters that the company must get approval from its main shareholders, which include members from Hitachi, Mitsubishi and NEC. The trio of companies are said to hold more than 90 percent of Renesas shares.

Reactions from these companies however, could be mixed. It is thought Mitsubishi will be happy to agree, riding high from shares in the business. However NEC, whose chip division was merged into Renesas just two years ago may not be so confident as a result of being  hit with steep losses in recent years.

One arm of Renesas's business that may face the chop is its LSI unit, which has been losing the company a fair amount of money. Sales in the unit fell 35.5 percent in the year that ended on March 31.

It is believed that the Japanese government may move in to help Renesas shift this business by pushing a plan to give this to Panasonic and Fujitsu with the help of funding. It may also move to help sell off the failing company's factories.