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To: DJBEINO who wrote (3989)	9/18/1998 1:42:00 PM
From: DJBEINO	Respond to of 9582

(UPDATE) Japan's NEC, Hitachi Plan Restructuring Measures As Losses Mount TOKYO -(Dow Jones)- The seriousness of problems facing Japan's semiconductor manufacturers was underlined Friday as NEC Corp. said it was expecting a group net loss for its fiscal first half and two other companies, Hitachi Ltd. and Oki Electric Industry Co., announced restructuring measures. Computer and components maker NEC (NIPNY), blaming a prolonged slump in global semiconductor demand and lower personal computer sales, said it would post group pretax and net losses of about 20 billion yen ($151.5 million) for the six months ended Sept. 30. It also announced plans to shed 4% of its work force over the next three years, resulting in the loss of 6,000 jobs. At the end of March, NEC had 152,450 employees in its group. NEC said domestic PC shipments will amount to around 1.3 million units in the first half instead of 1.5 million units as it had forecast in May. In the first half of last fiscal year, it shipped 1.55 million PCs in Japan. NEC also is planning to restructure its semiconductor operations in Southeast Asia and Europe in order to cut costs. Production of 16-megabit dynamic random access memory chips carried out in Malaysia will be shifted to Singapore while production of 16-megabit DRAMs and 64-megabit DRAMs done in Ireland will be moved to Scotland. Factories in Malaysia and Ireland will concentrate on production of logic devices with those in Singapore and Scotland focused on DRAM assembly, a spokesman said., Meanwhile, Hitachi and Oki Electric also disclosed changes in their chip-production operations. Hitachi said that on Oct. 20, Ibaraki Semicon Material Co., a wholly-owned unit of Hitachi's Hitachi Tokyo Electronics Co., would cease production of epitaxial wafers, which are known for their high-purity, defect-free qualities and help increase production yield. The company said 150 employees will be transferred to Hitachi Tokyo Electronics or their original departments. Production of 8-inch wafers now done at Ibaraki Semicon will be shifted to Hitachi Tokyo Electron. Hitachi also cited the prolonged industry slump and slow growth for its woes. "This will make our operations more efficient and cut fixed costs," said Masahiro Takahashi, a spokesman for Hitachi. "We want to improve our business profit by next fiscal year." Hitachi recently announced it would post a group net loss of 250 billion yen for the current fiscal year through March 31, 1999. Oki Electric said that earlier this month it had closed a part of a semiconductor plant in Miyazaki Prefecture in Japan for three days, putting workers on temporary leave. The company is considering an additional seven days of chip-production stoppages by the end of the fiscal year in March, either at the Miyazaki plant or a facility in Miyagi Prefecture. Oki said it is losing money on its semiconductor business, and may need to take these additional measures to respond to market conditions. Analysts said that measures to cut costs and increase efficiency are important, but another important issue is formulating a growth strategy. "For many companies, restructuring means cutting employees." said Hideki Wakabayashi, a senior analyst at Dresdner Kleinwort Benson (Asia). "What they need to ask is: What is the core business? What are the growth areas?"