Bloomberg 03/15 19:50 Hitachi, Joining Domestic Rivals, to Cut Chip Spending by 20%
By Minoru Matsutani
Tokyo, March 16 (Bloomberg) -- Hitachi Ltd. said it will spend about 20 percent less on its semiconductor business next fiscal year, saying inventories at makers of personal computers and digital products may remain high until at least September.
Japan's third-largest chipmaker joins rivals Toshiba Corp. and NEC Corp. in scaling back investment for the year beginning April 1 to account for weakening demand for everything from desktop computers to servers, the computers that run Web sites.
Underscoring challenges facing the industry, Compaq Computer Corp., the biggest PC maker, said yesterday it will cut jobs and expects profit to lag forecasts in the first quarter as sales slow. Hitachi, hoping conditions will improve, said it will allocate most capital spending to the second half though even that may change if a recovery fails to arise.
``If chip market conditions continue to slump in the second half of next fiscal year, we may cut spending further,'' Hitachi spokesman Seijin Shiraishi said in an interview.
In October, Hitachi said it would spend 204 billion yen ($1.7 billion) on its chip business this fiscal year. Based on the company's expected 20 percent reduction in spending, capital expenditures on chips will total 163 billion yen in the year ending March, 2002.
Hitachi's spending plans mirror those of its Japanese rivals. Toshiba, the world's second-largest chipmaker, said it will probably spend between 140 billion to 150 billion yen on semiconductors in the next fiscal year. NEC, the world's No. 3 chipmaker, will spend 174 billion yen on chips in the coming year, an amount based on an expected 20 percent cut in spending.
Even as Japanese chipmakers retreat, Intel Corp. is pushing ahead with plans to spend more on chips. The world's biggest chipmaker plans to spend $7.5 billion this calendar year, 12 percent more than the year-ago period. |
