Japan's Renesas Electronics Corp. has reached a deal with electronics maker Taiwan Semiconductor Manufacturing Co. to have TSMC produce chips.
Renesas said Monday in a statement the two companies will work together to develop chips to cut costs while maintaining quality.
Renesas shares plunged 10.6 percent in Tokyo trading Monday after weekend reports said the struggling semiconductor maker could trim up to 30 percent of its workforce.
The supplier to major automakers denied the report.
Earlier this year, Elpida, another Japanese chipmaker, filed for bankruptcy protection.
U.S. chipmaker Micron Technology Inc. is in talks to acquire Elpida Memory Inc.