Shares in troubled Japanese microchip maker Renesas rocketed more than 30 percent Wednesday following reports that a major US investment fund plans to spend $1.3 billion to take control of it. Kohlberg Kravis Roberts & Co. (KKR) would spend the 100 billion yen on new shares to be issued by Renesas, the Nikkei economic daily and other media said. The private equity firm has made the proposal to Renesas' top three shareholders -- NEC, Hitachi and Mitsubishi Electric -- as well as the chipmaker's main banks, the reports said. Shares in Renesas were up 35.08 percent at 308 yen in early afternoon trade on the Tokyo Stock Exchange. "Fears over the worst scenario for the firm's bankruptcy have faded away," said SMBC Friend Securities head of investment and research Fumiyuki Nakanishi. The relief overshadowed possible risks over share dilution through the capital increase, he told Dow Jones Newswires. No confirmation of the report was available from Renesas. KKR reportedly hopes to reach a formal agreement with the Japanese stakeholders as early as September. The 100 billion yen investment would be more than Renesas' market capitalisation of about 95 billion yen as of Tuesday. The cash injection would enable Renesas to tide over the imminent financial crisis but KKR is expected to demand thorough restructuring of the firm including further job cuts and factory sales, Japan's Mainichi daily said. Renesas expects to book an extraordinary loss of 150 billion yen for the current business year to March 2013 as it seeks more than 5,000 volunteers for early retirement and closes down some facilities. Local media said it plans to step up restructuring by boosting the number of job cuts to 14,000 jobs -- or roughly 30 percent of its workforce -- and shutting or selling nine domestic plants within three years. Renesas has said it would boost outsourcing of its chip production to Taiwan Semiconductor Manufacturing Co., including a bigger share of its output of microcontrollers -- key components in vehicles and home appliances. Japan's microchip sector has struggled with a strong yen and fierce competition, especially from South Korean and Taiwanese rivals. US-based Micron Technology is to buy another troubled Japanese chipmaker Elpida Memory for $2.5 billion.