Hitachi said on Friday it would cease production of chips used in information and telecoms hardware at the end of March 2014. The Japanese company said it would take that step to optimally allocate management resources to better enhance the competitiveness of Hitachi's Information & Telecommunication Systems business.

Hitachi will terminate the manufacture of semiconductor integrated circuits currently performed by the Micro Device Division under the Information & Telecommunication Systems Company on March 31, 2014. Going forward, the company will be to promote business by specializing in the development, design and quality assurance of LSIs primarily for Hitachi Group products, including information and telecommunication hardware.

Hitachi first established the Device Development Center in 1975, with the aim of developing semiconductor integrated circuits for information and telecommunication hardwares. In 2004, the center was incorporated under the Micro Device Division as part of organizational reforms. Since then, the center has been engaged in the design, development, manufacture and sale of semiconductor integrated circuits for the Hitachi Group and external customers utilized in information and telecommunication hardware, as well as for application in the measurement, medical and industrial equipment fields.

"The semiconductor industry has seen an increasingly horizontal division of labor in terms of development, design and manufacturing in recent years," Hitachi said in a statement.