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To: Ram Seetharaman who wrote (8844)	10/27/2000 6:15:22 AM
From: DJBEINO	Respond to of 9582

CSMF.SI closed @7.700 +0.300 +4.05% 7,597,000

To: Ram Seetharaman who wrote (8844)	10/27/2000 6:31:01 AM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

Toshiba Returns to Profit, Thanks to Chips By Reed Stevenson TOKYO (Reuters) - Japan's Toshiba Corp, the world's third-largest chip maker, posted on Friday a group net profit of 53.9 billion yen ($498 million) for the April-September half on brisk demand for memory chips and saw steady profits ahead. That marks a sharp turnaround from the 48.46 billion yen loss in the same period last year, and was in line with analysts' expectations and the sprawling electronic conglomerate's own forecast of 50 billion yen. Revenue rose 7.8 percent to 2.83 trillion yen from 2.62 trillion yen a year earlier. ``Toshiba apparently had a good half-year. But looking ahead, chip supply is believed to be surpassing demand in the global market, and semiconductors are the very core of Toshiba's wide range of products,'' said Toshihiro Koizumi, fund manager at Chuo Mitsui Asset Management, Toshiba shares closed down 0.35 percent at 856 yen, falling 33 percent from a record high of 1,280 hit in July. Shares in Toshiba, which makes a huge range of products from hair dryers to nuclear power reactors, have tumbled since July on widespread fears over the outlook for the chip business. Operating profit, which is pretax and does not include accounting charges, totaled 106 billion yen against a 30.6 billion yen loss a year earlier. Outlook Intact Toshiba, seeing little risk of chip oversupply ahead, raised its profit forecasts for the second time this business year and expects chips to make up 56 percent of operating profit. ``The question is whether this is a DRAM (dynamic random-access memory) problem or a short-term cycle problem,'' said company vice president Kiyoaki Shimagami. ``We believe it is a short term inventory adjustment.'' That view is in contrast to Intel Corp's September 21 sales warning, which sent technology stocks into a tailspin. For the full year, Toshiba now expects group net profit to recover to 137 billion yen from the record loss of 28 billion yen last year. Previously it forecast 135 billion yen. Operating profit was also revised slightly higher to 286 billion yen, nearly triple last year's result. Of that, 160 billion yen will come from semiconductors. Shimagami said the bulk of semiconductor profits were from specialty chips for cell phones and digital devices. Toshiba, which along with other chipmakers was hit hard by a slump in the DRAM chip market in the late 1990s, has been shifting its focus toward more sophisticated high-margin chips such as those used in digital cameras and compact memory cards. Steady, But Risks Remain Analysts are going along with the company's outlook. ``We believe the company is capable of achieving its full-year goal as well as posting around a 10 percent rise in operating profit in the next business year, unless DRAM prices plunge or DRAM price weakness spreads to other chip prices,'' said Shinko Securities analyst Toshiya Tsuchikawa. But Tsuchikawa said he expected gains to be limited for the company's shares as a bullish outlook had already been factored in and investor worries over global chip demand persisted. Toshiba said it expected to pay a 10 yen dividend compared with last year's three yen. One basic risk that Toshiba faces, like other Japanese conglomerates with global operations, is the strengthening of the yen, which erodes the value of their overseas sales and profits. Shimagami said forecasts were based on an outlook for 100 yen versus both the euro and dollar in the next six months. The euro was at 90.17 yen late on Friday and the dollar at 108.37 yen. For every one yen rise versus the dollar, Shimagami said Toshiba will lose 1.3 billion yen and for the euro, one billion yen. Analysts had the most bullish outlook for Toshiba among Japan's five major semiconductor makers, which include the world's second-largest chip maker, NEC Corp, Mitsubishi Electric Corp, Fujitsu Ltd and Hitachi Ltd dailynews.yahoo.com