Look out below...everything still looks downright ugly...and looking to stay ugly for awhile. barry
Thursday August 20, 5:53 am Eastern Time
Tokyo Electron sees 1998/99 loss amid chip slump
TOKYO, Aug 20 (Reuters) - The world's largest trading company dealing in semiconductor manufacturing equipment said on Thursday it was bracing for a sharp group net loss for the current fiscal year due to the industry's worst slump in a decade.
Tokyo Electron Ltd said orders are falling fast, particularly in markets such as the United States, Taiwan and Japan.
The industry's woes were expected to inflict a group net loss of six billion yen ($41.9 million) in the year to March 1999, a sharp drop from the group net profit of 7.5 billion yen Tokyo Electron earlier estimated, it said.
The company also slashed its dividend payment forecast for the year by more than half, to 12 yen from 30 yen the previous year.
''Chip makers, stuck with too much manufacturing capacity, are delaying purchases of necessary equipment, which in turn severely damaged our business,'' said an Tokyo Electron spokesman.
Tokyo Electron's total sales of semiconductor production equipment are expected to fall 35 percent in the 1998/99 year, and no recovery is in sight yet, he said.
Chip manufacturing equipment accounts for 85 percent of Tokyo Electron's sales.
The company's share price closed down 70 yen on the Tokyo Stock Exchange at 3,790 on Thursday.
Semiconductor makers have been reeling from sluggish business due to manufacturers' overcapacity, as well as the economic malaise in Asia and dramatic price cuts by personal computer makers.
The announcement of dismal business results is expected to be followed soon by industry peer Nikon Corp , the big producer of steppers, which are used to map out circuits on the silicon wafers used to make chips.
Nikon president Shoichiro Yoshida on Wednesday told a news conference that its stepper business had bottomed out and the company expected poor business results for the 1998/99 year.
Japan's big semiconductor makers are also bracing for bruising first-half earnings in the wake of fast falls in prices of mainstay 64-megabit dynamic random access memory chips.
Industry analysts expect all big makers, including NEC Corp , Toshiba Corp and Hitachi Ltd , to suffer group net losses in the first half.
They expect the firms will be forced to revise their forecasts for the business year to next March 31. |
