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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (41232)	1/2/2001 3:23:16 PM
From: Proud_Infidel	Respond to of 70976

Japan's chip makers remain cautiously optimistic about New Year By Faith Hung and Jack Robertson Electronic Buyers' News (01/02/01 14:52 p.m. EST) TOKYO -- Right after chip revenue and profits went soaring in the first half of 2000, the market suddenly went soft, leaving industry executives guessing where it would head next. Following last year's roller-coaster ride, none of the major Japanese semiconductor industry executives interviewed recently would stick their necks out to forecast 2001 sales. NEC Corp.'s Heiichi Shimakura is typical of this group. Based on booming sales early in 2000, NEC's Electron Devices group was expecting its revenue to rise more than 30% in the fiscal year ending March 31. In the current uncertain climate, however, the group still sees sales rising, but at a lower pace, to $9.6 billion, said Shimakura, deputy president of NEC's Electron Devices group. Koichi Nagasawa, president of Mitsubishi Electric Corp.'s semiconductor division, believes the company could still make its targeted $7 billion in chip revenue during its current fiscal year, a 35% increase from the year-ago period. But he throws his hands up in trying to predict what lies ahead in the next fiscal year. "There are too many global economic uncertainties," Nagasawa said. Hitachi Ltd.'s semiconductor sales are expected to increase more than 33% in its ongoing fiscal year, to $7.3 billion, said Seijin Shiraishi, general manager of market planning. Shiraishi attributed the expected increase to a 48% jump in microprocessor sales to $3.5 billion, nearly half of the chip division's total revenue. By contrast, DRAMs now constitute a much smaller portion of overall chip sales due to plunging prices, and in 2001 will only reflect foundry sales to Elpida Memory Inc., the new Hitachi-NEC DRAM joint venture. Elpida originally projected a 50% sales increase, to $2.7 billion, in the fiscal year beginning April 1, 2001-more than the combined DRAM sales of Hitachi and NEC in the prior year. However, the collapse of DRAM prices might reduce that projection, said Tokumasa Yasui, Elpida's executive vice president. "It's hard to know what DRAM pricing will be this year," he said. The story is different for flash-memory products. All the major Japanese flash vendors said they are sold out for the rest of their fiscal years and are predicting continued strong growth in the year ahead. Fujitsu Ltd.'s flash production will rise 50%, to 18 million units (of 16-Mbit equivalent) per month, in the ongoing fiscal year and jump 150%, to 43 million units next year, according to Kazuhisa Nakamura, general manager of the company's flash-memory division. Perhaps the best gauge of the Japanese chip outlook is in the semiconductor capital investment commitment. Japanese chip industry executives said the flip-flopped semiconductor market is already making them cautious about future spending. Mitsubishi's Nagasawa said his company nearly tripled its chip capital expenses in the current fiscal year, to $1.5 billion, but will cut chip capital spending perhaps 20% for the fiscal year beginning April 1. NEC's Electron Devices, which boosted fiscal 2001 capital spending nearly 50%, to $2.4 billion, may only hold it at this level for the next fiscal year, said Hajime Sasaki, NEC's chairman. Also, Hitachi's semiconductor capital spending in the next fiscal year will "likely be a little lower" than the $1.9 billion in the current fiscal year, Shiraishi said. Toshiba Corp. hasn't set capital spending plans yet, but intends to increase its outsourcing of chip production to conserve investment, a spokesman said. About 7% of all chip output is now outsourced, and this level is expected to increase to 25% by 2002, he added. Subject 50522