Japan's Chipmaking Equipment Orders Fell 21%, Nikkei Says
Tokyo, March 14 (Bloomberg) -- Worldwide orders for microchip-making equipment produced in Japan fell 21 percent in January from the same month a year earlier, the 14th straight monthly decline, the Nikkei Industrial Newspaper reported, citing the Semiconductor Equipment Association of Japan.
Orders for Japanese chipmaking equipment slipped to 47.603 billion yen ($398 million) in January, reflecting cuts in capital spending by U.S. and Japanese chipmakers, the report said. The SEAJ's figures are due for official release tomorrow.
The 14 months of shrinking orders reflects cuts in spending on equipment by Intel Corp., the world's largest chipmaker, Motorola Inc., Texas Instruments Inc. and Japan's six largest chipmakers. The rate of decline narrowed in January for the third straight month, though, suggesting demand for equipment is rebounding from a trough last October.
''It does seem we're past the very worst,'' said Richard Kaye, an analyst at Merrill Lynch Japan Inc. ''We're seeing a steady but very slow stream of orders, and by September the year- on-year totals should begin to show an increase again'' as chipmakers relax their purse strings, said Kaye.
Cuts in capital spending have already forced Tokyo Electron Ltd., Japan's largest overall maker of chipmaking equipment, Nikon Corp., the world's No. 1 maker of machines used to etch circuitry onto microchips, and Advantest Corp., the global leader in equipment to test memory chips, to cut their earnings forecasts for the year ending this month.
Analysts expect orders to improve again from year-earlier totals during the May-September period.
Worldwide sales of Japanese microchip-making equipment slumped in January for the ninth consecutive month, the report said. Sales decreased 56 percent from the year-earlier total to 41.52 billion yen, it said.
Sales tend to lag orders by several months to half a year, meaning sales are likely to continue to fall for many months ahead, in line with the 14 months of falling orders.
Domestic orders for chipmaking equipment climbed 11.1 percent to 37.95 billion yen, the first increase in 13 months, suggesting the worst of the cuts in spending on equipment is over from Japan's six largest chipmakers.
The six -- NEC Corp., Toshiba Corp., Hitachi Ltd., Fujitsu Ltd., Mitsubishi Electric Corp. and Oki Electric Industry Co. -- are slashing spending on their microchip businesses by a combined 44 percent for the fiscal year ending this month.
Sales in Japan of equipment made by Japanese and overseas companies, a reflection of orders placed about six months or so, crashed 58 percent from a year earlier to 24.169 billion yen, the report said.
02:53:09 03/14/1999
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