Siemens has decided to pull the plug on its nine year-old personal computer joint venture with Fujitsu, according to a newspaper report.

The German company has already told Fujitsu that it wants to end the Fujitsu Siemens Computers venture, a report in The Wall Street Journal said quoting people familiar with the matter.

A Fujitsu spokesman in Tokyo confirmed that the two companies are in discussions over the future of the 50:50 joint venture but said nothing has been decided to date. Siemens could not immediately be reached for comment.

The original agreement between the two companies is due to expire in 2009, so both Fujitsu and Siemens face the question of whether to renew it or end their partnership. If either party decides to exit the venture, the other party has the right to buy its shares, but in the current market, where price competition is cut-throat, it remains far from clear whether either company will want to invest the money into continuing the company.

The venture was formed on Oct. 1, 1999, after a proposed venture between Siemens and Taiwan's Acer collapsed. Siemens was searching for a partner to enable it to better compete with larger American and Japanese hardware makers.

Fujitsu Siemens operates in 36 countries and employs around 10,500 people. In its last fiscal year it reported revenue of € 6.6 billion (US$10.2 billion) and a pretax profit of €105 million.

The IDG News Service is a Network World affiliate.