US-based investment fund, Kohlberg Kravis Roberts & Co. (KKR) is will breathe a new life into Japanese microchip maker Renesas Electronics Corp with its much needed investment into the company.

KKR is planning to invest 100 billion yen or about $1.3 billion for acquiring the company, which has been struggling in the market due to increased competition and low demand for its products. Renesas had reported a net loss of
62.6bn yen during the financial year till March 2012.

Following the infusion, KKR will have a more than 50 per cent stake in Renesas, according to some media reports citing sources closer to the matter. Many believe that he much needed capital infusion will allow the management to turn around the company.

Renesas Electronics is the world's biggest manufacturer of microcontroller chips that are used in cars. It has an impressive market share of 25 per cent of the global market in the sector. The company had earlier announced a restructuring plan, under which it will either close or sell 19 plants and cut 5,000 jobs, which is about 12 per cent of its existing workforce.

The shares of Renesas rose 35 per cent to 308 yen in Tokyo.