Matsushita Electric Industrial Co said it's in talks to merge its LCD business with that of Toshiba Corp, a cost-cutting move that marks the latest sign of Japan's deepening electronics slump.
The companies may announce their plans sometime today, said Matsushita Electric spokesman Teruhisa Noro. His statement came as Fujitsu Ltd confirmed a report that it may post a wider-than-expected full-year loss, and TDK Corp, Japan's largest disk-drive maker, said its factories have been running at less than 60 percent of capacity since August.
"Those reports are just another reminder that a rebound in the technology sector won't come this year," said Nagayuki Yamagishi, a strategist at Tsubasa Securities Co.
Hitachi Ltd, Toshiba and other Japanese electronics makers in August announced thousands of job cuts and projected losses on slumping demand for computers, mobile phones and the parts that run them. With the largest economy tumbling into recession after Sept. 11's terrorist attacks in the US, Sony Corp, NEC Corp and other companies have revised down their earnings projections.
"It's safer to say a turnaround for the sector will come later than expected, even though some people are beginning to think the terrorist attacks won't snuff out consumption as much as we thought," said Tsubasha's Yamagishi.
Slowing demand has forced Japanese companies to look for more ways to cut costs.
Osaka-based Minolta Co will shift all of its domestic camera production to its Shanghai joint venture by the end of March 2003, said company spokesman Akihisa Maruyama, confirming part of a report earlier today in the Nihon Keizai newspaper.
The company hopes to improve its profitability by using cheaper labor in China, Maruyama said. Minolta's camera business is expected to post a current loss, or pretax loss from operations, of ?4 billion on sales of ?90 billion in its fiscal year ending March 31, he said.
Minolta last month said it will eliminate 2,500 jobs by the end of March 2004 and get rid of some assets in a bid to return to profit. The company forecast a group net loss of 23.5 billion yen in its fiscal first half, ended Sept. 30, compared with a loss of 3.13 billion for a year earlier.
Tokyo-based TDK's factories have been running at 50 to 60 percent of capacity since August, said company spokesman Nobuyuki Koike. The components maker has been carrying 2.6 months worth of inventory since the end of June and hopes to trim stockpiles to 1.5 months, he said.
TDK earlier this month said it will cut 8,800 jobs, or 20 percent of its workforce, because of slumping demand.
Kyocera Corp, the biggest maker of ceramic casings that protect semiconductors, has been running its plants at 60 percent of capacity, said company spokesman Hitoshi Inoue. The components maker in August said it would eliminate 10,000 jobs, or 20 percent of its workforce.
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