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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (19513)	4/12/2002 9:59:46 AM
From: JohnG	Read Replies (2) \| Respond to of 34857

TDK Says Weak Parts Demand Leaves Plants in China Partly Idle By Kyoko Suzuki Tokyo, April 12 (Bloomberg) -- TDK Corp., a maker of components for mobile-phone maker Nokia OYJ, said demand for some of its parts isn't meeting expectations, leaving some of its factories in China partly idle. Company unit TDK Suzhou Co., which makes and sells parts for mobile phones and digital TVs, is currently producing about 400 million stacked chip condensers a month, 60 percent short of capacity, spokesman Nobuyuki Koike said. In January last year when the plant was established, TDK planned for the factory to be using 100 percent of its capacity by the end of 2001. TDK is among a growing list of Japanese manufacturers increasing production in China to take advantage of lower labor costs. With the Chinese market for mobile phones and digital televisions still in the early stages of growth, TDK remains reliant on the pace of growth in more mature markets. ``Manufacturers are still depleting inventories of electronics components so there's no need to rush and increase production,'' Koike said. ```We didn't expect the situation to be so bad.'' Stacked chip condensers, also known as multilayer capacitors, are used in mobile phones and other kinds of consumer electronics to regulate the flow of electricity. A single mobile phone can contain more than 200 of the parts. China Sales TDK, whose shares have fallen about 18 percent the past year, expects a group loss of about 26 billion yen ($197 million) for the year just ended. The company had sales of 200 billion yen from its Chinese operation in the year to March 2001, with the domestic market accounting for 40 billion yen. The company exports the remainder of the products outside China. Even though the Chinese market is growing, ``it's still not big enough to absorb all of the production,'' Koike said. The components maker has six other production sites in China, including facilities in Dailain and Dongwan City, which are also running at similar capacity, Koike said. As Japan's largest maker of computer disk-drive components, TDK is exposed to weak demand for personal computers and other computer-related parts. IBM Corp., the world's largest computer maker, this week said earnings for the first quarter of the year will miss analyst forecasts, blaming slower-than-expected pickup in corporate investment on technology such as computer systems and networks. Gartner Inc. projects about 29.4 million PCs will probably be sold in the second quarter, less than the 30.5 million in the previous three months. The researcher estimates industrywide sales are expected to rise just 4.3 percent this year. Slower sales of PCs and mobile phones -- worldwide handset shipments fell last year for the first time ever -- are also affecting other Japanese components makers. Taiyo Yuden Co. yesterday said sales for the fiscal year just ended probably missed its target set last November because demand for telecommunications equipment failed to recover as the company had expected.