Toshiba, NEC in talks to integrate semiconductor business

TOKYO, Jan. 30 (Chinese media) -- Toshiba Corp. and NEC

Corp. have begun talks to integrate their troubling semiconductor operations to

combat plummeting chip prices and dwindling global demand, local media reported

Friday.

Fujitsu Ltd. may also participate in the deal in the

future since it is also looking for a tie-up partner for its semiconductor unit,

which was spun off in March last year, Kyodo News said, citing sources familiar

with the matter.

Industry insiders believe if the three-way

integration realized, it is likely to trigger a major realignment in the

semiconductor industry.

The talks between Toshiba and NEC are also likely to

involve integrating Toshiba's system LSI operations with NEC Electronics Corp.,

a major chip-making subsidiary of NEC, the sources said.

Toshiba and NEC have already formed an alliance to

jointly develop a cutting-edge system LSI.

Toshiba, the world's No. 2 maker of NAND flash

memory, and other major chip-making companies throughout the industry have been

reeling under a global industry-wide slump caused mainly by the spreading global

recession.

On Thursday, Toshiba said it expects a group

largest-ever net and operating loss of 280 billion yen (about 3.09764 billion

U.S. dollars) for fiscal 2008, its first red-ink in seven

years.