TOKYO, JAPAN: Toshiba Corp said on Friday it plans to set up a joint venture for system chip assembly in China to help cut costs.

Toshiba, which like other Japanese chipmakers is grappling with system chip losses, said it would team up with Nantong Fujitsu Microelectronics, owned 43 percent by Nantong Huada Microelectronics Group and 29 per cent by Japan's Fujitsu Ltd.

Toshiba, which will take an 80 percent stake in the new venture, declined to give an investment figure or the capacity of the venture. It said Toshiba Semiconductor (Wuxi) would package and test basic system chips, such as those used to control sound and video signals for analog TVs.

System chip sales at Toshiba and its Japanese rivals such as Fujitsu and Renesas Technology, due to merge with NEC Electronics in April, have been hurt by brutal infighting for the same Japanese clients such as Sony, Panasonic and Canon.

Toshiba has been hurrying to restructure its system chip operations, selling equipment in October to a venture formed with Nakaya Microdevices Corp and Amkor Technology Inc to assemble and test high-end system chips.

System chips are semiconductors that can control multiple functions on a single sliver of silicon and are used to help lower power consumption when space is limited, such as in cellphones, flat TVs, digital cameras and digital music players.