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on Friday disputed a Japanese newspaper report that it's planning to merge its high-end server unit with

Sun Microsystems

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The report, which appeared Thursday in the highly-respected Nihon Keizai Shimbun, also reportedly said Fujitsu would manufacture cutting-edge Sparc chips for Sun, according to Dow Jones.

Fujitsu has outsourced some lower-end Sparc processors for Sun in the past, but

Texas Instruments

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currently produces the high-end version of the silicon.

John Stewart, a representative for Fujitsu, said, "The rumors are not true. We talk with Sun all the time but have no current discussions on mergers or acquisitions."

A representative for Sun declined to comment on the report, though she confirmed that Sun CEO Scott McNealy had met with Fujitsu executives at a meeting in Tokyo this week, as part of a scheduled visit to Asia.

"The only thing we've acknowledged is that Fujitsu is a Sun partner and as part of the ongoing relationship we're always looking for ways to improve and expand the business," said Kasey Holman, director of communications for Sun systems.

Fujitsu currently resells Sun servers and uses Sun's Sparc and Solaris technologies in its own boxes.

Investors didn't sound overly receptive to the reported linkup, given Sun's reduced market share and diminishing influence in the technology industry. In the second quarter, Sun was the only member of the top five server worldwide server vendors to see negative revenue growth, with sales down 18.7% from the prior year.

Vincent Colicchio, manager of the

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All-American Equity fund, said the report reminded him of speculation about troubled


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teaming up with



. "It's two companies saying, 'Okay, we're in a dying market; let's drown together.' They'll drown less slowly but they'll still drown."

As of the second quarter, the most recent for which information is available, Sun was ranked third in global server revenue, behind


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. Sun claimed 13.5% of share -- a decline from last year's 16.6% -- with $1.43 billion in sales.

Fujitsu Siemens ranked fourth with 2.7% of the market and $286 million in revenue.

The combined second-quarter sales of the two companies total $1.72 billion -- still less than second-ranked H-P, which claimed $2.95 billion in sales.