Fujitsu to Spend 40% More Than Planned to Boost Chip Capacity This Year
By Miki Takeyama with translation from Peter Poole-Wilson
Fujitsu to Spend 40% More Than Planned on Memory Chip Business
Tokyo, Aug. 20 (Bloomberg) -- Fujitsu Ltd., Japan's fourth-
largest computer chipmaker, said it will invest 40 percent more
money in its microchip business in the year to March 2000 than it
had initially planned to boost output of more sophisticated and
profitable chips.
Fujitsu, whose shares have more than doubled to record
levels this year, will spend 90 billion yen ($803 million) on its
chip business this fiscal year compared with its initial plan of
65 billion yen, said company spokeswoman Naomi Ogawa.
The extra spending will be used to increase production
capacity so the company can meet surging demand for flash memory
computer chips -- used in portable products such as mobile phones
-- and logic chips used as the brains in household digital
appliances. Orders for such devices are so strong Fujitsu's chip
business may return to the black this fiscal year, Ogawa said.
''At the beginning of the fiscal year we were looking at an
operating loss of 10 billion yen on our chip business for the
year, but now it looks like we could make a little bit of
money,'' said Ogawa.
Under President Naoyuki Akikusa, who took over in June last
year, Fujitsu is trying to steer away from low-margin or
unprofitable businesses such as computer-memory chips, which
contributed to its loss in the year to March 31. The company will
concentrate instead on more profitable and sophisticated devices
such as flash memory chips used in mobile phones and other
portable electronics.
The fresh money will go towards tooling up four Fujitsu
factories in Fukushima Prefecture and Iwate Prefecture, northern
Japan, and its Gresham factory in the U.S. state of Oregon.
Tokyo-based Fujitsu, Japan's largest computer maker, until
now has been making dynamic random-access memory chips -- the
memory chips most commonly used in PCs -- at its Gresham and
Iwate factories.
It's reducing its production of DRAMs and will use its new
investment to reconfigure production lines there to make flash
memories and logic chips for products such as camcorders.
Fujitsu's joint venture in Japan with Advanced Micro Devices
Inc. of the U.S. is already the world's dominant maker of flash
memory chips. Flash memories retain their information even when
their power source is turned off, making them ideal for use in
portable products such as cellular phones and hand-held
computers.
Fujitsu lost money in the year ended March 31 and posted
earnings declines each of the previous two years, in part because
of losses on DRAM chips.
Fujitsu said earlier this month it will stop making DRAMs in
Japan by the end of 2001 as it shifts to more profitable types of
chips.
Fujitsu shares rose as much as 40 yen to 3,320 yen in early-
afternoon trading. The stock reached a record 3,680 yen on Aug.
3. |
