Fujitsu wants to restart chip business merger talks -

Fujitsu wants to resume talks about a possible merger of its flagging system chip division.

In a bid to keep up with South Korean competition and remain a part of Japan's semiconductor market, the company wants to pick up on talks with Renesas and Panasonic, which have in the past been interested in a partnership.

The talks between the trio had involved combining Fujitsu's system LSI chip into their operations.

However, they came to a halt after Renesas suffered with declining finances as a result of Elipda's bankruptcy in February. Now, Fujitsu wants the company to buck up and begin turning around its business before more talks can take place.

Fujitsu President Masami Yamamoto said the merger would benefit Japan, but it all hinged on whether Renesas could turn its business around.

He was quoted by Reuters as claiming: "We must keep semiconductors, which use cutting edge technology, in Japan or lose the bedrock of manufacturing.

"In order to survive, Japanese businesses must consolidate."

Renesas has been trying to raise more than $1.3 billion (100 billion yen) in fresh capital and plans to cut at least 12,000 jobs, sources have told Reuters.