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To: Zeev Hed who wrote (77755)	8/20/2001 12:17:48 AM
From: Don Green	Respond to of 93625

Chipmaker Reportedly to Cut Workforce by 15,000 Sunday August 19 8:03 AM ET TOKYO (Reuters) - Japanese giant chipmaker Fujitsu Ltd. will slash its worldwide workforce by 15,000, or nearly 10 percent, and close some overseas plants in response to the high-tech slump, a newspaper said on Sunday. Details of the sweeping restructuring, which had been flagged by Japan's biggest flash memory chip maker, would be announced on Monday, the Nihon Keizai Shimbun business daily said without citing sources. No one was available to comment at Fujitsu. The chip giant shocked the market last month by forecasting a $1.83 billion consolidated net loss for the year to next March, largely reflecting a massive restructuring charge to cope with the chip and electronics slowdown. That was steeply down from its previous profit estimate of $41 million. Fujitsu will slash the jobs by next March, the paper said, while Kyodo news agency said the plant closures will take place by March 2004. Analysts have taken a positive view of the company's pledge to buckle down and reform after months of sticking stubbornly to rosy forecasts that critics said were overly optimistic. The company, which reported a group operating loss of $351 million in the April-June quarter, will consolidate its domestic and overseas plants for computers and telecommunications products, the newspaper said. ONLY 3,000 JOB CUTS IN JAPAN Manufacturing plants in North America and the rest of Asia are expected to bear the brunt of the overhaul, with only 3,000 workers at home expected to lose their jobs, it said. An early retirement system introduced last month will be used at home, Kyodo reported, citing company officials. They also said Fujitsu will consider consolidating its product lines for semiconductors -- the main culprit for the firm's weak earnings performance -- including those in northern Japan. Fujitsu plans to scale down its hardware operations and concentrate on the software and services divisions with high growth potential to improve profitability, they said. It will also focus on production of profitable high value-added items in its mainline operations such as microchips, computers and communications equipment, they said, according to Kyodo. SOFTWARE AND SERVICES ALLIANCES In the telecommunications field, Fujitsu will end production of switches in the United States and concentrate on fiber-optic products. Fujitsu will shift several thousand production workers to software and services divisions and create a task force to promote global corporate alliances and buy-outs in these fields, it said. Fujitsu's announcement would come in the wake of flagging worldwide PC sales and a focus at PC makers on managing costs, including through deep job cuts. Fujitsu last month announced a four-week summer suspension in output of some of its flash memory chips, which are mainly used in mobile phones -- one of the hardest-hit sectors in this year's info-tech slump. It also said it would sharply cut flash memory chip production at its U.S. facility in Oregon, its only remaining overseas semiconductor plant. Analysts expect Fujitsu's once hugely profitable flash memory business to do little more than break even in the current business year. The software and service segment, Fujitsu's stronghold, is also suffering from slow demand at home because debt-ridden Japanese banks are cautious about lending to companies for spending on information technology, analysts said. Fujitsu said last month it plans to post a $2.32 billion special loss in the six months to June 30 to restructure its operations and boost earnings. The special loss would total $2.49 billion for the full year through next March. It has lowered its semiconductor capital expenditure target for this business year to $1.16 billion from an originally planned $1.57 billion. In addition, it has cut its chip output target to $3.94 billion from an originally planned $5.72 billion, down 24.6 percent from actual output in the previous year. ($1-120.44 Yen)

To: Zeev Hed who wrote (77755)	8/20/2001 12:17:51 AM
From: Jdaasoc	Respond to of 93625

Zeev: I am going to stick with my Chap 7 projection. They are trying to move from IP firm to anything else to pay the bills like memory module sellers. However, if memory prices don't stop their downwards spiral, they are going to leave a lot of IUOs to MU and INFX. I purchased SDRAM from Enchanced Memory, a Ramtron Co, on WED last week and gave them CC number. They screwed up on getting approval and called back on Thursday. Gave them the information again and I got a 5% discount in pricing in just one day due to spot market price decreases. Their value of their inventory is going up in smoke. john