Fujitsu's spin off of its semiconductor unit will cost over $90 million USD

The electronics industry is one of the most competitive markets around. Many manufacturers of electronic goods and components find that they need to team up with rival companies to be able to produce goods at affordable costs. Some makers also find that the best way to shore up profits is to cut loss generating categories from their product lines.

Sometimes cutting a loss generator doesn’t mean simply closing up the production lines, rather it can mean spinning the loss generating business off into a separate company. InformationWeek reports that Fujitsu is doing just that by spinning off its semiconductor unit.

Moving the required equipment for the spinoff to its Mie plant will cost Fujitsu about 10 billion Yen or around $93.6 million USD. Fujitsu says that the transfer of equipment is set for March of 2008 and is scheduled to be complete in the April to September 2008 time frame. Once set up, the plant will produce semiconductors using 45-nm process technology.

Fujitsu says, “Details regarding the new subsidiary to be established as a result of the spin-off are currently under consideration, and are scheduled to be announced when available.”

DailyTech reported in November that Fujitsu posted a Q2 profit that was down 62%. Fujitsu said at the time that the massive loss was mainly attributed to a new accounting practice it was using internally. Fujitsu’s executive vice president further claimed that if they had not changed accounting practices they would have reported a profit in the same quarter.

The spinoff of its semiconductor business isn’t the first attempt from Fujitsu to improve profits. DailyTech reported last week that Hitachi, Fujitsu and Toshiba were in talks on a storage joint venture.

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