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Monday, January 24, 2000
Chipmakers Plan Big Investment In System Chips
TOKYO (Nikkei)--Major Japanese semiconductor producers aim to begin actively investing from fiscal 2000 in equipment to make system chips. Such chips are designed to perform multiple functions by integrating discrete circuit blocks on a single chip.
NEC Corp. (6701), Japan's largest chipmaker, has advanced its timetable for such investment by one year with a view to boosting semiconductor sales by 50% to 1.6 trillion yen by fiscal 2002. Toshiba Corp., the nation's second-ranking manufacturer, which reduced capital spending on its chip division by 20% in fiscal 1999 to 95 billion yen, will spend more than 100 billion yen annually from fiscal 2000, company sources said.
Demand for system chips is expected to expand rapidly as the market for Internet-compatible home electronics takes off.
NEC aims to boost output capacity at its plants in Kumamoto and Yamagata by raising capital spending by at least 10% in fiscal 2000, from 150 billion yen in fiscal 1999. The company aims to sell over 1 trillion yen worth of system chips in fiscal 2000.
Besides making more system chips, Toshiba plans to set up a new plant in the U.S. to make flash memories for use in digital home appliances. Its chip sales are projected to reach 1.4 trillion yen in fiscal 2002, up from an estimated 900 billion yen in fiscal 1999.
Hitachi Ltd. (6501), whose new system chip plant will come on-stream in 2001, intends to boost its chip sales to 1.2 trillion yen in fiscal 2003, up 80% from the fiscal 1999 level. System chip sales are projected to account for 60%, or about 700 billion yen, of total chip sales, company sources said.
Japanese chipmakers have curbed capital investment ever since plunging into the red due to poor sales of commodity-grade memory chips in the previous fiscal year. As a result, their share of the world chip market slid from more than 50% in the late 1980s to 25% in 1999.
The companies aim to reduce their dependence on DRAM chips and compete better in the system chip market, a high-growth area in which U.S. firms Motorola Inc., Texas Instruments Inc. and International Business Machines Corp. are investing heavily.
(The Nihon Keizai Shimbun Monday morning edition)
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