Fujitsu Siemens Computers, a joint venture between Japan-based Fujitsu and Germany-based Siemens may cease to exist if Siemens decides to pull out from the hardly profitable business. If this happens, other computer makers may acquire the biggest PC supplier in the European Union.

According to a news-story by Reuters news-agency, executives of Fujitsu and Siemens are currently in talks regarding the future of the FSC in Japan. If the companies do not come to an agreement and no partner will notify about the decision to pull out from the business, the venture will be automatically extended for another five years from 2009.

“If Siemens were to decide to pull out, Fujitsu would most likely be unwilling to buy Siemens's stake, given the business climate. Fujitsu's brand by itself is not enough to carry in Europe, where the popularity of low cost models has meant tough price competition,” a source close to negotiations is reported to have said.

Chief executive of Siemens Peter Loescher has complained about low profitability of the computer maker. In 2007/08, FSC made a pretax profit of €105 million ($166 million) on sales of over €6.6 billion ($10.49 billion). However, since profit margins on the market of personal computers are very low these days, the complain may not be reasonable.

If Siemens decides to abandon the venture, it is highly likely that either Fujitsu will have to find a new partner, who will agree to acquire Siemens’ stake, or sell the company completely to an investor or another PC supplier.

According to Gartner market research firm Fujitsu commands 5.3% of European PC market and is considerably behind companies like Dell (24.6%), Hewlett Packard (22.6%), Acer (11.4%) and Toshiba (8%).