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Fujitsu plans to spin off chip business

Fujitsu Ltd, Japan's fourth-largest chipmaker, said it will spin off its semiconductor business by the end of March next year to improve efficiency and speed up development.

Fujitsu will also spend ¥10 billion (US$94 million) to move its operations for developing advanced chips to a production facility in Mie Prefecture, central Japan, the Tokyo-based company said in a statement yesterday.

The company in November estimated sales from chips would rise 12 percent to ¥530 billion this fiscal year. Fujitsu, which doubled profit during the three years after disposing of the unprofitable memory-chip and flat-panel units in 2005, joins NEC Electronics Corp in reducing chip investments this fiscal year amid slumping demand for semiconductors used in electronics.

Fujitsu's semiconductors, used in its computer servers and Sony Corp's camcorders and cameras, accounted for less than 10 percent of total revenue last fiscal year.

The business is forecast to generate less than ¥5 billion in profit this fiscal year, compared with a loss of 20 billion yen a year earlier, chief financial officer Masamichi Ogura said on Nov. 22.

The company and Advanced Micro Devices Inc in 1993 combined their NOR flash memory divisions and created Spansion Inc.

That company, Intel Corp's biggest rival in mobile-phone memory chips, sold shares to the public in December 2006.
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