Fujitsu Ltd said its joint venture with Advanced Micro Devices Inc will cut a third of its total output of memory chips for mobile phones for a month, after cellular-phone makers worldwide slashed shipment forecasts.
The joint venture will suspend production of flash memory chips, the main memory used in mobile phones, in one of its three factories in Fukushima prefecture, north to Tokyo, said Takanori Jinno, head of semiconductor marketing at Fujitsu. The partners are the two biggest flash makers after Intel Corp.
Earnings from Fujitsu's chip business are decreasing this year because customers such as Nokia Oyj are buying fewer parts as they see demand for cellphones wane. Halting output at one plant for a month may not be enough to stem the 40 percent decline in chip prices this year, analysts said.
"It may make some difference, but not much," said Haruo Sato, an analyst at Tokai Tokyo Securities Co, who rates the shares "neutral." "Still, longer suspension will sap Fujitsu's market shares, which it doesn't want."
The news was earlier reported by Nihon Keizai newspaper without citing sources. Nikkei English News later said without naming sources that Fujitsu will stop microchip production in the US and is in final talks with Advance Micro to sell Fujitsu's Gresham, Oregon, plant to the US company.
Advanced Micro spokesman John Greenagel had no comment. "I have no information on that at all." Fujitsu officials were not immediately available for comment on that report.
The plant that will halt operation makes 30,000 sheets of silicon wafers a month, which are diced into rectangles to become microchips. That's a third of Fujitsu's current flash memory production of 90,000 sheets, Jinno said.
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