Toshiba Corp and other Japanese semiconductor makers may lose money for a second straight year because they have been slower to cut costs and move to more-profitable chips than competitors, analysts and investors said. \nToshiba, the world's second-largest chipmaker, and its four largest domestic rivals -- NEC Corp, Hitachi Ltd, Mitsubishi Electric Corp and Fujitsu Ltd -- last week reported a combined loss of ?1.5 trillion (US$11.7 billion) for the fiscal year ended March 31. Chipmaking accounted for much of the losses. \nThe companies are trying to recover from the industry's worst slump by spending billions of dollars to reduce staff and reorganize businesses. They have been tardy in making such moves, as well as in moving away from commodity-type chips to ones with higher profit potential such as those used in video-game consoles and digital cameras, analysts said. \n"Japanese chipmakers need a complete change in management to achieve real restructuring," said Fumiaki Sato, a Deutsche Securities analyst. "The current managers are afraid to cut jobs and make drastic changes to their organizations." \nIndustrywide chip sales tumbled to their lowest level on record last year as sales of personal computers and mobile phones slumped, causing makers of those products to curb chip orders. \nWhile companies such as South Korea's Samsung Electronics Co and Germany's Infineon Technologies AG are faring better, Japanese companies are struggling to survive. \nToshiba said last week its chip unit posted a ?120 billion loss for the year ended March 31 -- almost half the company's record full-year loss of ?254 billion. NEC's chip unit had a loss of ?100 billion. Hitachi said its chip business had lost ?133 billion. \nFujitsu, Hitachi and Mitsubishi Electric say they expect smaller losses this year, while Toshiba and NEC predict their chip businesses will return to profit. That may be wishful thinking, an investor said. \n"Restructuring such as job cuts will help, but we cannot be optimistic" about the chipmakers' prospects, said Yoshiya Morimoto, who helps manage equities for Japan Investment Trust Management Co. "Total demand for chips depends on consumer spending, which is not growing significantly, especially in the US." \nWhen the recovery does come, Japanese chipmakers may not benefit as much as competitors from a recovery, analyst Sato said. \n"They haven't clarified which businesses they will focus on and how they will increase profits," he said. \nThe Japanese companies are paying for their headlong rush into commodity-like memory chips, whose prices have plunged amid a supply glut. Now they are phasing out of memory chips to focus on so-called system chips, specialized devices used in video-game consoles and other appliances. Demand for such "designer" chips is relatively stable and easier to predict. \nStill, as more companies jump into specialized chips, profit margins in those businesses may narrow. "System chips will not produce enough profit because the big chipmakers are all opting for a similar direction, making competition fiercer," said Akira Minamikawa, an analyst at WestLB Securities Pacific Ltd. \nJapan's chipmakers also lag behind rivals such as Intel Corp, the world's biggest chipmaker, in gearing up production of the specialized chips. \n"To get profit from system chips the way Intel and Texas Instruments Inc does, Japanese chipmakers must make chips for products that will sell millions of units," said Satoru Oyama, a Lehman Brothers analyst. \nChipmakers outside of Japan already are starting to get more orders. Samsung, the world's largest computer-memory-chip maker, last month reported record first-quarter profit on brisk demand for dynamic random-access memory chips and mobile phones.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
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Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees