I miss the the good old days with headlines like "TSMC sold out of capacity for next 2 years." But this is creative destruction at its finest, the first step towards a recovery.
Hitachi to eliminate 14,700 jobs, cut chip capital spending 57%
Semiconductor Business News
(08/31/01 09:02 a.m. EST)
TOKYO -- Hitachi Ltd. today outlined massive cutbacks in its businesses, including the elimination of 14,700 jobs worldwide and restructuring of its trouble semiconductor division. The "emergency" action has been widely anticipated and follows a similar move by Toshib Corp., which last week announced the elimination of 18,800 jobs to stem losses in the electronics industry's recession (see Aug. 26 story).
Hitachi today said it will cut 10,200 jobs in Japan and 4,500 positions overseas. About 2,000 of those job cuts in Japan will be in Hitachi semiconductor operations. Hitachi said it was scaling down a number of chip manufacturing plants in Japan and abroad, including its DRAM facility in Singapore, called Hitachi Nippon Steel Semiconductor Singapore Pte.
The Japanese electronics giant said it will slashing semiconductor capital spending by 57% to 60 billion yen ($500 million) from an original budget of 140 billion yen ($1.17 billion) in the current fiscal year, which ends March 31, 2002.
Among the actions being taken to consolidate chip manufacturing groups, the company said it would shutdown various production plants and shift some of its system-on-chip fabrications to 300-mm wafers at Hitachi's joint venture with United Microelectronics Corp. of Taiwan. The Trecenti Technologies Inc. venture is already ramping flash memory and SRAM production on 300-mm (12-inch) diameter wafers, said Hitachi.
In DRAMs, Hitachi has teamed up with NEC Corp. in a joint venture, called Elpida Memory Inc., which is expected to be spun off in a public stock offering. Hitachi said the offering will be made once the business and equity markets have stabilized from the current downturn.
Hitachi said it now expects to post a net loss of 140 billion yen ($1.17 billion) in the 2001 fiscal year, which ends March 31, 2002, instead of a net income of 90 billion yen ($750 million) projected last April. The company's total sales are now projected to fall 10.3% to 7.85 trillion yen ($65.4 billion) in the current fiscal year compared to 8.75 trillion yen ($72.9 billion). |
