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To: DJBEINO who wrote (2377)	1/20/1998 11:48:00 PM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

Big 5 Chipmakers To Cut FY98 Investment By Combined 10% TOKYO (Nikkei)-Semiconductor manufacturers NEC Corp., Toshiba Corp., Hitachi Ltd., Fujitsu Ltd. and Mitsubishi Electric Corp. are likely to slash their combined consolidated investment for fiscal 1998 by at least 10% from the 785 billion yen projected at the beginning of the current fiscal year, The Nihon Keizai Shimbun has learned. The cuts will peg capital spending below 700 billion yen for the first time in four years. The chip market has been slow because of sluggish personal computer sales and the Asian economic downturn. The five chipmakers all expect lower earnings this fiscal term, for the second straight year. Toshiba plans to reduce capital investment in chips by 10 billion yen or more. Toshiba originally planned to hold investment flat in fiscal 1998, but reported Tuesday it expects its group net profit to nose-dive 85% this fiscal year and sees no guarantee of an earnings recovery next term. Fujitsu, thus far the most aggressive of the five in investment strategy, will sharply scale back new plant spending. The company originally planned to spend about 150 billion yen to build a plant to process 300mm wafers in Fukushima Prefecture, but will now switch to older technology at a cost of about 100 billion yen. Mitsubishi and Hitachi both expect losses in their chip divisions, and both plan to cut at least 10 billion yen from investment outlays. NEC will maintain fiscal 1997 levels of investment. The combined chip investment for the five will fall for the third straight fiscal year from a peak of 886.7 billion yen in fiscal 1995.