More good news for Rambus
Note: As companies pare back memory chip production, supply decreases leading to higher prices. These guys will love to sell Rambus memory as it will command higher margins. This is good news for the entire industry.
Hitachi, Mitsubishi Elec. to Close U.S. Plants Because of
Low Chip Prices
Hitachi, Mitsubishi Electric to Close U.S. Plants (Update1) (Updates to add
companies' share prices. Changes dateline.)
Tokyo, Sept. 2 (Bloomberg) -- Two of Japan's biggest semiconductor makers,
Hitachi Ltd. and Mitsubishi Electric Corp., said they will close plants and fire
workers in the U.S. because of weak prices for computer-memory chips.
Hitachi, Japan's largest electronics maker, said it will combine two of its U.S.
units, cutting about 650 jobs and closing a memory-chip plant in Texas.
Mitsubishi Electric plans to close a memory-chip assembly plant in Durham,
North Carolina, cutting 230 jobs.
Prices of dynamic random-access memory chips, the most common memory
chips in personal computers, have fallen 70 percent in the past 12 months,
leaving manufacturers with large losses. Many have cut production and
canceled plans for new plants. ''People are losing their shirts in memory chips,''
said Dan Hutcheson, an analyst at VLSI Research in San Jose.
Hitachi is the sixth-largest chip company in the world. Mitsubishi Electric is
No. 10. Both are based in Tokyo.
Hitachi said its new, merged subsidiary will focus on designing microprocessors
that power hand-held computers, electronic games and other devices. Those
chips command higher prices than DRAMs, which now sell for about $2
apiece.
Texas Plant
Hitachi's Texas plant has about 500 workers, all of whom will be fired.
Another 150 positions will be cut in California, where the two units that are
being combined are based.
Hitachi Semiconductor (America) Inc., which manufactures and sells computer
chips, will be combined with Hitachi Micro Systems Inc., a chip-design and
engineering unit, to form Hitachi Semiconductor (America) Inc., based in San
Jose, California. The combination will be completed by Oct. 1, Hitachi said.
The new unit will have 370 employees. Its chief executive will be Peter Clark,
who was vice president at Hitachi Micro Systems. Hitachi Ltd., the parent
company, has 16,000 employees working in 70 subsidiaries around the U.S.
Hitachi has been losing money in its semiconductor and household-electronics
businesses. The company plans to reorganize into about 10 divisions to try to
cut costs. It has 900 subsidiaries now, making mainframe computers, elevators,
televisions and heavy equipment for power plants. It lost $238 million in the six
months ended March 31.
Mitsubishi Electric
Mitsubishi Electric, meanwhile, said it will close the Durham plant Nov. 6 as
part of a plan to centralize memory-chip assembly and test operations in
Nagano, Japan. It is looking for an outside vendor to assemble memory
modules, the collections of memory chips used in computers. That work had
been done at the Durham plant. The company closed a DRAM manufacturing
plant in Durham earlier this year because of falling prices.
The industry ''has been in an oversupply situation since 1996, which has forced
(memory-chip) prices down to ridiculous levels,'' said Michael Bocian, a
general manager for memory products at Mitsubishi Electronics America Inc.
Hitachi's American depositary receipts, each representing 10 common shares,
rose 2 7/8 to 52 1/4 yesterday.
Mitsubishi's American depositary receipts, which also represent 10 common
shares, fell 3/8 to 18 1/8.
In Tokyo today, Hitachi shares rose as much as 43 yen to 760, Mitsubishi
shares rose as much as 9 yen to 282. |
