News and Articles

Toshiba * 1760 record quarterly loss mln dlrs for chips

* Bajará costs mln dlrs for 3300


* NEC Elec loss records, will reduce costs by 890 mln dlrs

* Toshiba will eliminate 4,000 contract, NEC, 1200

Toshiba Corp said Thursday it plans to reduce costs by 3,300 million dollars next fiscal year by a reduction in capital spending and hired workers, noting that it aims to its worst annual loss.


The second largest worldwide manufacturer of NAND memory, next to industry leader Samsung Electronics, are fighting a slowdown that has already been nearly two years, caused by a chronic excess supply and weak demand for digital cameras and other electronic devices.

Semiconductor manufacturers have cut production to revive prices, but the anemic consumer demand has limited price increases and forced some companies to seek government support.


Toshiba said it will cut capital spending by half in the year starting in April, by delaying the construction of two new plants of flash memory chips and slowing other projects.

Moreover remove posts 4500 recruits, but will return to take 500 people employed by the division of power plants and elevators, which used to make profits.


Analysts warned that further cuts in personnel and costs could limit future growth and market share.

"Only a restructuring will not help the companies in the current economic conditions," said Masaru Hamasaki, senior strategist for Toyota Asset Management.


"If companies cut jobs or reduce capital spending on the basis of its current level of earnings, this can lead to shrink their business," he warned.

Toshiba has moved its operations in recent years, allocating resources to focus on NAND flash memory chips, used in digital music devices like the iPod from Apple Inc. or cell phones.


The global market for flash memories retrajo in the third quarter over the same period last year, according to research firm iSuppli.

The electronics group is simultaneously punched in the global recession, the strong yen and depression of the chip sector, said Fumio Muraoka, executive vice president of corporate signature at a press conference.


The company announced the red in the third fiscal quarter and warned that it expects to close in negative fiscal year, which means the group's first annual loss in 7 years.

Toshiba said in the third quarter had an operating loss of 158,800 million yen.

He also noted that throughout the year (ending in March) might incur a loss of 280,000 million yen, compared with a previous forecast of a gain of 150,000 million.

All 16 analysts consulted by Reuters expect an annual operating loss of 67,500 million yen.

SHADOWS IN THE FIELD OF CHIPS

Its local rival NEC Electronics Corp, which makes chips for Nintendo's Wii console and Co for Lexus luxury car from Toyota Motor Corp., also warned a net loss for the fourth consecutive year.

The deterioration of the economy crushed the prospects for a restructuring of the subsidiary of electronics manufacturer NEC Corp.

Now expects operating loss of 55,000 million yen in the year ending in March, versus a previous forecast of a profit of 1,000 million yen, amid a drop in sales of autos, televisions display crista liquid phones cell phones and other products.

NEC Electronics, which reported a quarterly operating loss of 16,200 million yen, reported that cut costs by 890 million dollars over two years, eliminating 1,200 jobs under contract.