According to 2011 data estimates of market research firm iSuppli, Renesas Electronics ranked No. 3 in the global System LSI industry with 4.5 percent market share last year, followed closely by Samsung which recorded fourth place with 3.9 percent.

With Intel being the dominant player with 23.2 percent market share in 2011, Fujitsu Semiconductor ranked 18th with 1.3 percent in market share and Panasonic came in 20th with 1.1 during the same period, it said.

“The merger is yet to be confirmed, however, we’re aware that Renesas is above our ranking in the non-memory sector. Whatever the plans are, we will still go our own way as we’re pushing plans to pursue growth in that particular business with bigger investments,” said a Samsung official.

But another industry source said that the merger would likely have an impact in the non-memory sector because the industry is likely to ultimately concentrate on wireless devices although the scope varies at this point.

“Considering that the industry is largely headed for mobile, there will ultimately be a business focus for the international electronics firms in that field,” the source said.

News reports also said the new joint venture, created by the three Japanese firms, would develop system chips for smartphones and automobiles among other products, staging a fight with Samsung and Intel.

Earlier, Panasonic said it expected to post its worst-ever net loss of 780 billion yen this fiscal year, while Renesas forecasts a 57 billion yen hole in its balance sheet. Fujitsu also projects its net profit to go down as much as 36.5 percent on year.

In the memory sector, Japan’s Elpida, which has about a 12 percent share in the dynamic random access memory market, has cut production from early December and also posted a wider-than-expected 43.8 billion yen operating loss for the final quarter of last year. The firm is reportedly seeking a rescue deal with U.S.-based Micron and Taiwanese firm Nanya Technology.

By Cho Ji-hyun (sharon@heraldcorp.com)