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To: DJBEINO who wrote (41545)	12/21/1998 10:11:00 PM
From: DJBEINO	Respond to of 53903

Hitachi withdraws from wafer production By Yoshiko Hara EE Times (12/21/98, 12:35 p.m. EDT) TOKYO — Hitachi Ltd. will withdraw from wafer production next spring to concentrate resources on the restucturing of its semiconductor business. Hitachi currently produces about $86 million of wafers, including 5-inch, 6-inch and 8-inch epitaxial wafers, a year, primarily for internal use. The company has been producing wafers for about 30 years. Shin-Etsu Handotai Co. Ltd., the world's largest wafer supplier and a major supplier to Hitachi, will hire about two-thirds of the workers at Hitachi's wafer unit and take over production there. Hitachi will lay off the remaining workers. Shin-Etsu plans to shift the production formerly done by Hitachi to its own factories after about three years of transition. With an anticipated loss of about $862 million for its current fiscal year, Hitachi has appropriated an extraordinary loss of about $1.5 billion for a restructuring. About $776 million of the extraordinary loss will be taken for a restructuring of the company's semiconductor business, which is already underway. The restructuring of the semiconductor business has included such drastic measures as canceling in March the Twinstar joint venture with Texas Instrument Inc., the closure of a production line at Hitachi Semiconductor (America), the shift of assembly operations of Hitachi Semiconductor (Europe) GmbH to Malaysia, and the integration of domestic assembly factories. The withdrawal from wafer production is a part of the ongoing restructuring. Last spring, Hitachi had closed an epitaxial wafer fab that had operated for only one-and-a-half years. The wafer market has been sluggish this year. The silicon wafer committee of the Japan Society of Newer Metal had projected 8 percent growth at the beginning of this year, but downgraded its estimate this past summer. "At present the situation is severe," said Yasushi Kitamura, senior managing director of Shin-Etsu Handotai. "But to maintain line operation at a high level is important, so the transfer will bring a good result in mid- or long-term." eet.com