Japanese semiconductor manufacturer NEC Electronics Corp warned yesterday that it expected to fall much deeper into the red this year than previously expected because of sluggish chip sales.
The firm, a subsidiary of electronics giant NEC Corp, forecast a net loss of ¥45 billion (US$371.6 million) for the current fiscal year to next month, compared with a ¥25 billion loss previously predicted.
Operating losses are now seen at ¥30 billion -- over three times more than the previous forecast of ¥7 billion. The firm expects to book restructuring costs of about ¥10 billion. Revenue is expected to reach ¥690 billion instead of ¥695 billion.
NEC Electronics said it had decided to shift to a greater focus on the automotive and digital consumer markets and reorganize its manufacturing operations in light of the poor performance.
Chief executive Toshio Nakajima said: "Management resources were not focused enough, leading to weak products that could not compete in global markets and scattered product line-ups."
"We were slow to reorganize manufacturing lines, and despite various measures we have taken, we could not keep up with the pace of price erosion," he said in a statement.
The firm said it would reduce annual fixed costs -- including the salaries of its top executives -- by ¥20 billion and reduce capital expenditure in the goal of returning to an operating profit over the next 12 months.
It aims to cut down production lines in half by consolidating them and to accelerate a shift of production overseas.
RSS