07/29 17:21 EST
Japan Notes Uptick In Chip, Appliance Sales
Jul 29, 1999 (Tech Web - CMP via COMTEX) -- While continuing to
struggle with intense price pressure for commodity products, Japan's
electronics companies got a much neededboost as sales of semiconductors
and digital consumer electronics devices started to surge during the
first half of the year.
The uptick in orders for products such as logic, discretes,
microcontrollers, and flash memory have prompted Japan's major chip
makers to scrap or scale back early plans to temporarily shut down
their fabs as they have in recent years during the summer holiday next
month.
Mitsubishi Electric said it has cancelled plans for summer production
line stoppages at its three main semiconductor factories in Kumamoto,
Saijo, and Kochi, Japan. Original plans had called for nine- to 10-day
closings at the plants in mid-August, according to Mitsubishi.
Current plans call for the factories to continue full production runs
throughout the summer months to help Mitsubishi respond to strong
demand for products such as flash memory and microcontrollers, the
company said in a statement.
"The semiconductor industry became active since the beginning of this
year," said Koichi Nagasawa, president of Mitsubishi's semiconductor
group. "The price situation of memory is still harsh, but as a whole,
the market will grow by about 10 percent compared to the year before.
The growth of system-on-chip is especially conspicuous."
Toshiba, which has previously shut down some plants for up to 10 days
during the summer vacation season if demand is slow, said it too will
keep its factories humming.
"This year, not only logic but bipolar and discrete [sales] are picking
up, so we are planning to operate the factories even during summer
vacation," a spokesman said. "Especially with bipolar and discrete,
most of the sales go to Asia, and the Asian economy is now on its way
to recovery compared to last year, so we're able to get more orders."
Toshiba's contract with Sony Computer Entertainment to produce 128-bit
Emotion Engine CPUs for Sony's Playstation 2 has given the chip maker
another reason not to shut down. The company this month started
preparing for the manufacture of the CPU in the third quarter, and
intends to deliver one million CPUs and two million Direct Rambus DRAMs
to Sony by year's end, the spokesman said.
NEC, meanwhile, will temporarily shut down its three major chip plants
and its LCD plants to conduct tests for Y2K compliance. But due to a
spike in demand for chips and FPDs, the company will close the plants
for a maximum of three days rather than five days as originally
planned, a spokesman said.
There is also evidence of increased demand for wafers among the world's
chip manufacturers. According to Nikkei Market Access, demand for
wafers and total available capacity were nearly equal in April. The
research firm also said a wafer shortage could be imminent because of a
40 percent drop in wafer prices last year, which prompted wafer
manufacturers to stop expanding capacity. Meanwhile, higher demand for
chips used for high-volume products like cellular phones and the low
yields for 0.18-micron process technology are contributing to increases
in wafer demand, the researchers said.
Sony said sales of semiconductors were on the rise in it first fiscal
quarter results due to stronger demand for digital audio/video
products. Among its digital electronic products, the company noted
higher sales for digital camcorders, digital still cameras, DVD
players, home PCs and CD-RW recording systems.
But the company's overall electronics business declined almost 9
percent, to $8.7 billion, due to weakening sales of older product lines
and the appreciation of the yen. Among the products with declining
sales were color TVs, cellular phones, computer displays, and analog
camcorders. Sales of the Playstation game console also slid 15.5
percent, to $950 million.
At the same time, rock-bottom DRAM prices could continue to impede
major Japanese chip manufacturers from making a significant comeback
this year. DRAMs are the main reason why Toshiba does not expect to
pull its semiconductor operations out of the red this year, the company
spokesman said.
And despite predictions to the contrary, Mitsubishi's Nagasawa said he
expects there will be no DRAM shortage this year. Even though
manufacturers are suppressing large-scale investments in DRAM fabs, the
move from 0.25-micron to 0.18-micron process technology alone will
enable chip makers to increase the number of die on one wafer from
about 300 chips to 850 devices, he said.
Indeed, Toshiba said its move to a 0.2-micron process will cause
monthly output to increase more than it had planned. The company had
expected to produce 14 million 64-Mbit equivalent units per month by
year's end, but the shift to 0.2-micron technology at its Dominion
Semiconductor fab in Manassas, Va., and at its plant in Yokkaichi,
Japan, plus additional outsourcing to Winbond will push monthly output
up to 19 million equivalent units by the end of September, the
spokesman said.
Additional reporting by Yoshiko Hara
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Copyright (C) 1999 CMP Media Inc.
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