Nikon Corp. is considering slashing up to 1,000 domestic jobs in underperforming semiconductor equipment and digital camera businesses amid competition with overseas rivals and the shrinking market for such products, a source familiar with the matter said Tuesday.

The optics and imaging products maker is currently focusing on developing new growth businesses such as medical devices. Likely subject to the job cuts are employees at its Kumagaya plant, which assembles semiconductor lithography systems in Saitama Prefecture, and others elsewhere, according to the source.

Nikon was the world's leading lithography system producer until the 1990s, but has recently been surpassed by a Dutch rival in market share and fell into the red in the sector, while its camera business suffers from a shrinking market due to the widespread use of smartphones.

Shopping sprees by visitors from abroad, mainly China and other Asian nations, had helped Nikon's bottom line.

But in August, Masashi Oka, the senior executive vice president of Nikon, told reporters that the company would push forward structural reform of its businesses as it considers the boost from such shopping sprees one-time demand amid a waning of the trend.

Nikon in the same month revised down its net sales projection for the year ending March 2017 by ¥20 billion to ¥820 billion.

Smartphones have torn into the camera sector dominated not only by Nikon but also Canon, Olympus, Fujifilm and Sony — much as digital cameras all but destroyed the market for photographic film years ago.