Jul. 2--TOKYO -- NEC Electronics Corp. President Junshi Yamaguchi indicated Thursday that his company, after inking an integration contract with fellow chipmaker Renesas Technology Corp., is eyeing either Toshiba Corp. or Panasonic Corp. as its partner in developing an advanced semiconductor system.

"We are set to hold discussions on how to consolidate the process development after inking the contract for our integration since it would be odd to have two kinds of development," Yamaguchi said in an interview with Kyodo News.

NEC Electronics and Renesas Technology are set to sign their contract at the end of July, with an eye to integrating their operations by April 1, 2010.

The deal between Renesas, Japan's No. 2 semiconductor maker, and third-ranked NEC Electronics is set to create the world's No. 3 chipmaker, behind Intel Corp. of the United States and Samsung Electronics Co. of South Korea.

In terms of developing the state-of-the-art LSI system, NEC Electronics, a chip unit of NEC Corp., has Toshiba as its partner, while Renesas, a joint venture between Hitachi Ltd. and Mitsubishi Electric Corp., has teamed up with Panasonic.

Yamaguchi said that since the development NEC Electronics is pursuing and that of Renesas overlap in certain areas, he does not see the need to maintain both undertakings.

On the envisioned integration, Yamaguchi declined to disclose further details, including the new entity's integration ratio.

He also vowed to return the company's earnings to the black for the current fiscal year through next March and said the firm will continue to draw strength from providing chips to cars amid the growing popularity of hybrid cars and electric vehicles.

Amid a severe global slump caused by stagnant demand and erosion of chip prices, the company posted a group net loss of 82.6 billion yen for the business year that ended in March, which is bigger than that of the previous year's group net loss of about 16 billion yen.

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