NEC to shift UK plant output from DRAMs
By Edmund Klamann
TOKYO, April 26 (Reuters) - Japan's number-two chip maker,
NEC Corp, said on Thursday it plans to halt output of DRAM chips
at its plant in Scotland by March 2003 and shift production to
more profitable products.
A company spokesman said the company had no plans at present
to lay off any employees at the plant as a result of the change.
Earlier this month NEC announced plans to cut 700 jobs at a
California chip plant, due to declining semiconductor demand, and
to halt the facility's production of DRAM chips by June, shifting
towards higher-margin devices such as chips for the
communications market.
The company also plans to steadily reduce the proportion of
DRAM output at a Chinese chip joint venture while increasing the
share of logic LSI (large-scale integration) chips and foundry
production, the spokesman said.
DRAM (dynamic random-access memory) prices fell sharply in
the latter half of last year, pushing many Japanese chipmakers'
DRAM operations into the red in the second half of the 2000/01
business year to March 31.
NEC will announce its 2000/01 earnings results and targets
for 2001/02 after the market closes on Thursday. The rest of
Japan's five big chipmaking conglomerates will also announce
earnings results and forecasts on Thursday and Friday.
NEC and Hitachi Ltd HIT.TK have formed a joint venture,
Elpida, to undertake future DRAM development and manufacturing
operations for the two companies.
Elpida plans to start operating a new plant in the first half
of next year capable of producing 300 mm wafers -- bigger and
thus higher-yielding than the currently common 200 mm variety.
SEEKING HIGHER MARGINS
The spokesman said NEC makes about 210 million DRAM chips per
month based on a 64 MB equivalent, of which nearly 40 percent are
made abroad.
In a revised earnings projection issued in February, the
company said it expected memory chip revenues in 2000/01 of 265.6
billion yen ($2.18 billion), or more than one-fourth its total
for semiconductors. DRAMs account for the bulk of the memory chip
figure.
he company also said in February it would boost its
production of Rambus DRAM chips, which are faster than
conventional DRAMs and command a higher price.
Toshiba Corp TOS.TK, Japan's other leading producer of DRAM
chips, is also aiming to boost the proportion of Rambus DRAMs,
which are used in Sony Corp's SNY.TK PlayStation2 game console
and chipsets for Intel Corp's INTC new Pentium 4 processor.
Japanese chipmakers' DRAM operations have struggled to
compete with more efficient producers such as South Korea's
Samsung Electronics 05930.KS and U.S. chipmaker Micron
Technology Inc MU.
Business daily Nihon Keizai Shimbun estimates the break-even
price for 64 MB DRAM chips at $3 to $4 per chip for Micron and
Samsung, compared with $5 for Japanese chipmakers.
Earlier this week the Nihon Keizai also reported that NEC
would end all production of liquid crystal displays (LCDs) for
personal computers, outsourcing its requirements to a Taiwanese
company among others while focusing on producing smaller LCDs for
cell phones and larger industrial-use models.
NEC is considering a number of corporate reforms to bolster
its profitability, including making some factories into separate
companies that would offer electronic manufacturing services to
other firms in addition to NEC.
NEC's shares ended morning trade up 2.77 percent at 2,225
yen, modestly outperforming a 1.41 percent gain in the
technology-sensitive Nikkei average <.N225>. |
