(Reuters) - Japanese chipmaker Renesas Electronics Corp plans to sell off loss-making operations and cut its payroll by at least 12,000, a source close to the matter told Reuters on Saturday, as the company battles high costs and nimbler foreign rivals.

Sources also confirmed that Renesas, the world's largest maker of microcontroller chips for cars, aims to raise more than 100 billion yen ($1.3 billion) to pay for restructuring costs and will take the plan to Hitachi Ltd and its other major shareholders as early as next week.

The Nikkei business daily reported on Saturday that Taiwan Semiconductor Manufacturing Co plans to buy a Renesas chip plant at Tsuruoka, in northern Japan, as part of the plan, although the sources did not confirm this.

Renesas could not be reached for comment. TSMC spokeswoman Elizabeth Sun declined to comment on the report, saying the company does not comment on market rumors.

Renesas said last week it would form a tie-up with TSMC, which already counts Renesas as one of its clients, but declined to give details ahead of a formal announcement due on Monday.

Renesas has posted cumulative net losses of nearly $6 billion over the past seven years as it struggles to keep up with South Korea's Samsung Electronics and others in an expensive race to build ever smaller and faster chips.

Hobbled by a strong yen and forced to close eight of its factories after natural disasters in Japan and Thailand last year, Renesas has said it would hammer out a restructuring scheme by July.

Renesas has presented a plan to its major lenders that would cut its payroll by at least 12,000, including 5,000 voluntary redundancies, the source close to the matter said.

The sale of the Tsuruoka system chip factory and its Renesas Mobile unit, which makes chips for mobile phones, would remove another 3,100 workers from its payroll, while the remaining reductions would come via natural attrition and restructuring at other facilities, the source said.

The plan would trim its payroll by more than a quarter.

The Tsuruoka plant, which makes system chips that combine processing and other functions on a single sliver of silicon and are used in a range of digital electronics, has been a major burden for Renesas as Japanese consumer electronics makers cut production of TVs and other products.

Renesas was formed over the past decade via successive mergers of the chip units of Hitachi, Mitsubishi Electric, and NEC Corp.

Mitsubishi Electric, whose earnings along with Hitachi have been bolstered by strong results in the infrastructure business and limited exposure to consumer electronics, said last week that Renesas's shareholders were prepared to offer support.

But NEC, whose chip division was merged into Renesas just two years ago, has been hit with steep losses in recent years as its mobile handset and IT hardware businesses struggle.

Renesas shares have lost more than half their value over the past two months as worries mounted about the company's operations, while Tokyo's benchmark Nikkei average is down 15 percent.