Struggling Japanese chipmaker Renesas is in talks with foreign companies about selling the mobile phone chip business it bought from Nokia three years ago.
"It is one of the options we are looking at," Tetsuya Tsurumaru, who took over as president on February 22 this year, told reporters in Tokyo, Reuters reported Thursday.
"Overseas is our main focus," Tsurumaru said, although he added a sale in Japan was also a possibility. He did not specify which companies Renesas was speaking to or confirm whether any discussions on a domestic deal were underway, the report said.
Tsurumaru's comment comes about a week after Renesas said it will decide whether to sell the mobile chip unit in fiscal 2013.
The division has been in the red since Renesas acquired the business in 2010 from Nokia for US$1.9 billion, contributing to losses which eventually forced the chipmaker to seek a US$1.6 billion government-led bailout last December. It was to counter a bid by U.S. private equity firm KKR & Co, amid fears that Renesas' technology could end up in foreign hands, Reuters reported.
Earlier in October, Renesas also received US$1 billion from its banks and main shareholders Hitachi, NEC and Mitsubishi Electric, the report added.
According to Reuters, the company will receive its state financing by the end of September. The company agreed to the government-led bailout in exchange for a two-third stake, which will be owned by the taxpayer-funded Innovation Network Corp of Japan (INCJ).
The report also cited unnamed sources as saying Renesas was still in talks to join an all-Japanese merger with the system chip divisions of Panasonic and Fujitstu, which make microchips used in TVs, digital cameras and other consumer electronic products.
Renesas is the world's leading maker of microcontroller chips used in cars. Last month it cut its earning forecast for the year to March 2013 to an operating loss of 26 billion yen (US$272.24 million), down from its previous forecast of a 21 billion yen (US$) profit.
In July last year, the company said it was cutting more than 5,000 jobs, or 12 percent of its global workforce to save costs, and possibly close or sell up to 10 of its 18 domestic plants over the next three years.