Toshiba Corp and Hitachi Ltd, both of which had record net losses last fiscal year, say they expect lower costs to aid their recovery this year.
The stronger yen and a weaker-than-expected US economy are raising doubts that cutting costs is enough, analysts and investors say. Their success, they say, lies in developing chip designs no other company can copy and grabbing more of the market for products in which they're already strong.
Taiwan Semiconductor Manu-facturing Co (
"The chip industry isn't a growth story," said Wilfrid Pham, who helps oversee about US$2 billion at HSBC Asset Management Japan and prefers Japanese retailers and railway stocks. "There's no interest in the industry in the short term and no growth-driving catalyst."
Toshiba, Hitachi and Mitsubishi Electric Corp may show whether Japan's chipmakers, through cost cuts and plant closings, have been able to reverse losses when they report earnings for the April to June period tomorrow.
Already, NEC Corp. last week said first-quarter chip sales fell 3 percent to Japanese yen 167 billion (US$1.3 billion). Overall, sales at Japan's second-largest chipmaker fell 9 percent to Japanese yen 1.02 trillion.
Chip sales at Sony Corp, the world's second-largest consumer-electronics maker, slumped 7.5 percent in the three months ended June 30 while Fujitsu Ltd's semiconductor sales slumped almost 25 percent in the period to Y79 billion.
Toshiba and Hitachi, Japan's first and third-largest chipmakers respectively, are becoming accustomed to dire predictions for the chip industry. According to Dataquest Inc, sales slumped 32 percent worldwide to US$154.9 billion in 2001, the biggest drop ever. Sales will probably rise just 3.4 percent this year, Dataquest said earlier this month.
Tokyo-based Toshiba and Hitachi cut thousands of employees and closed unprofitable plants. Executives at both companies said in April that the reorganization of their businesses -- Toshiba went so far as to sell its US memory-chip business to Micron Technology Inc -- would assure a recovery even if chip sales don't improve.
Toshiba said in April that last fiscal year's job cuts and plant closings would reduce fixed costs by Japanese yen 180 billion in the year ending March 2003 and onwards. Hitachi calculates Japanese yen 200 billion in savings beginning this fiscal year.
"Cost-cutting [mainly from job reductions] is the only certain factor that will help them make profit this year," said Yoshihide Ohtake, an analyst at Shinko Securities Co, who covers Japanese chipmakers.
So far, Japan's top five chipmakers have said they're confident they can weather a slowdown in chips for computers and mobile phones. Their answer: chips for consumer electronics such as DVD players and digital cameras made by companies like Matsushita Electric Industrial Co and Sony Corp.
In a sign that bet may be paying off, first quarter sales to customers at Sony's electronics business rose 5.5 percent, contributing to a surge in operating profit to Japanese yen 49.1 billion at the division.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained