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To: Amadeo Mendez-Vigo who wrote (8611)	9/28/2000 2:07:39 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Hitachi hikes chip production outsourcing (to UMC) TOKYO, Sept 28 (Reuters) - Japanese chipmaker Hitachi Ltd said on Thursday it aims to bring chip production outsourcing to 10 percent of total output to cut costs as well as to lower the risk of holding excess capacity. ``We would consider a further boost up to 20 percent in the future depending on market conditions,'' a company spokesman said. Hitachi, one of Japan's five top chipmakers, plans to raise the percentage of its chips made by subcontractors to 10 percent by the end of the business year to March 2001, from the current five percent, he said. Late last year, Japanese electronics giant Hitachi began to place orders with outside chip makers. The Tokyo-based company now outsources chip production largely to Taiwan's United Microelectronics Corp (UMC) and Episil Semiconductors Inc -- both of which have equity ties with Hitachi. It also gives orders to some Japanese and Korean chip makers, the spokesman said. Like Hitachi, other Japanese chipmakers have recently been raising chip production outsourcing to cut hefty capital investment costs. Toshiba Corp , Japan's second largest chipmaker, plans to increase the percentage of production it outsources production to 25 percent in the 2002/03 business year, against seven percent in 1999/2000. At 0530 GMT, shares in Hitachi were down 0.58 percent at 1,200 yen. biz.yahoo.com