Fujitsu to spin off chip division

Semiconductor price wars force another chipmaker to refocus.

By James Carbone -- Purchasing, 1/22/2008 1:39:00 PM

Japanese electronics firm Fujitsu says it will spin off its semiconductor operations into a new subsidiary in an effort to make it easier to do alliances with other chip companies.

The company says the new chip subsidiary, scheduled for completion in March, will enable Fujitsu to accelerate the growth of its application specific standard products as well as it application specific integrated circuits business.

The company also said it would transfer development and test production of system chips to its Mie plant in central Japan from a technology center in Tokyo, at a cost of about $94 million. The firm said these moves are designed to speed up its chip operations to better compete in the industry.

"Fujitsu had been injecting funds (into semiconductors) from its IT business, and management has seen that this is not healthy," said JP Morgan analyst Yoshiharu Izumi in a MarketWatch report.

Fujitsu’s chip operation has suffered because of falling semiconductor prices.

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