Renesas had initially considered a public share offering to strengthen its capital, the Nikkei said without quoting sources. But massive costs related to its planned restructuring will likely force the company to fall into a net loss in the business year to March 2013 and make it difficult to do so, the daily added.

Renesas, the world's fifth-largest chipmaker and a product of successive mergers of Hitachi Ltd (6501.T), Mitsubishi Electric (6503.T) and NEC Corp (6701.T), has been struggling in the face of increased overseas competition and high costs as it tries to restructure its loss-making LSI business.

The Nikkei also said Renesas has already secured an agreement with Hitachi, Mitsubishi Electric and NEC on 50 billion yen in financial assistance, with another 50 billion yen in financing expected from Bank of Tokyo-Mitsubishi UFJ and three other main lenders.

Hitachi, Mitsubishi Electric and NEC said on June 20 in a statement that they had agreed to provide some kind of support, but that the details are "under consideration". ($1 = 80.4950 Japanese yen)

(Reporting by Risa Maeda; Editing by Jeremy Laurence)

• A Permanent Economic Emergency