techweb.com
Mitsubishi To Sell Half Its Semis
In-House
(08/21/98; 12:23 p.m. ET)
By Jack Robertson , Electronic Buyers' News
U.S. chip analysts are treating lightly reports from Japan
that Mitsubishi Electric's chip division would try to
double the amount of integrated circuits (ICs) sold
in-house to sister divisions. Mitsubishi officials in Japan
reportedly said they hoped in fiscal 1999 that internal
sales could reach 50 percent of total semiconductor
revenue.
Without a corporate mandate for greater in-house
purchasing of Mitsubishi chips, the semiconductor
group faces the same competitive battle that has
resulted in sister original equipment manufacturer
divisions traditionally buying three-quarters of their ICs
from external sources. The other Mitsubishi divisions,
already irked that plunging dynamic RAM (DRAM)
prices have pushed corporate profits heavily in the red,
are unlikely to give the chip operation any more favored
treatment in their purchasing.
"There are always misgivings when a company does
something like that because the people selling outside
the company think they can get a higher price, and the
people buying inside the company want to get a lower
price," said Jim Handy, director of the memory service
at Dataquest, in San Jose, Calif. "What Mitsubishi will
have is a lot of grumbling, but people will fall in line for
the greater good of the company."
He said Mitsubishi's move could cause problems for its
DRAM suppliers that don't have vertically integrated
operations to sell their own DRAMs to. "A company
that doesn't consume DRAM but only produces it
would count on a Mitsubishi for business," he said.
Other companies could be affected if the other vertically
integrated DRAM makers followed suit, but so far, this
does not appear to be the start of a trend, he said.
Mitsubishi Electric reported a $772 million net loss for
the year ended March 31. |
