Japanese electronics firm Fujitsu said on Monday it would put its struggling semiconductor operations into a new unit, in a move that could smooth the way for partnerships with other chipmakers.

Fujitsu’s business building system chips, used in products ranging from digital cameras to supercomputers, has suffered from falling prices and the high cost of keeping up with the latest technology.

The company also said it would transfer development and test production of state-of-the-art system chips to its Mie plant in central Japan from a technology centre in Tokyo, at a cost of some 10bn (48m).

The firm said these moves are designed to speed up its chip operations to better compete in the industry.

Price drops and a shortage of engineers, coupled with massive investment costs, are prompting system chipmakers to band together as they race to move to smaller circuit sizes in an attempt to cut production costs and make energy-efficient and powerful chips.