FUJITSU Ltd, a Japanese maker of computers, network equipment and mobile phones, will eliminate 5,000 jobs and merge its LSI chip business with that of Panasonic Corp to boost global competitiveness.

The venture will design large-scale integration, or LSI chips, and contract out their manufacture, according to a joint statement the companies released yesterday. The state-backed Development Bank of Japan has been asked to help finance the venture, the firms said.

Fujitsu is seeking help from the DBJ to fund the venture, adding to the list of Japanese electronics makers that have shed or paired lower margin businesses. The Tokyo-based firm will take 112 billion yen (US$1.2 billion) in charges for restructuring its chip business by March 31 and will also transfer 4,500 workers to new ventures, it said.

"The chip industry in Japan is in a tough situation, as manufacturers can't profit from making them, even though they have cutting-edge technology," said Mitsuo Shimizu, a Tokyo-based analyst at Iwai Cosmo Holdings Inc. "The company may need to take additional restructuring steps.

Fujitsu may cut about 3,000 jobs in Japan and 2,000 overseas, it said.