Toshiba Corp, Japan's biggest chipmaker, will cut investment at its semiconductor business by 29 percent this year because of insufficient demand for mobile phone and computer chips.
The Tokyo-based company will reduce spending on chip plants and equipment to ?100 billion (US$800 million) from the ?140 billion earmarked at the beginning of the fiscal year started April 1, Toshiba spokesman Kenichi Sugiyama said.
"We hope demand will pick up in the fourth quarter of this calendar year but we aren't sure yet," Sugiyama said, confirming an earlier report in the Nihon Keizai newspaper. "If demand picks up, we'll deal with the situation accordingly."
Worldwide sales of semiconductors may slip to US$175 billion this year, a drop of 14 percent from 2000, the Semiconductor Industry Association said earlier this month. Chipmakers worldwide are reducing investment to adjust for lower demand.
Micron Technology Inc, the biggest US maker of personal-computer memory chips, this week cut its capital spending target for this fiscal year to US$1.8 billion from the US$2 billion it had planned. Toshiba said this week it will reduce chip production at four plants in the next two months to cut costs, signaling a recovery may be later than the chipmaker had expected.
Other Japanese chipmakers, which recently cut this year's capital spending plan, will further trim spending because demand for personal computers and cellular phones remains sluggish, the Nihon Keizai said, without citing sources.
Fujitsu Ltd, Japan's biggest maker of business computers, plans to cut spending by more than ?10 billion from the original plan to below ?180 billion, the report said.
"We haven't decided on any specific figures," said Fujitsu spokeswoman Chiaki Kuwahara. "We are always discussing the amount and details of our plant and equipment investment to meet market conditions, so changes are always possible."
Toshiba's shares rose 3.6 percent to ?659. Fujitsu's shares gained 2.7 percent to 1,310.
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