Toshiba Corp, the No. 2 chipmaker, will fire 10 percent of its workers worldwide by March 2004 and projects a full-year loss amid a decline in semiconductor prices.
Toshiba will make 17,000 job cuts in Japan, the company said in a press release. It has 190,000 employees worldwide.
The Tokyo-based company now expects a group net loss of ?115 billion (US$956.3 million) for its fiscal year that began April 1. Toshiba previously projected a ?60 billion profit. The company now sees sales at ?5.75 trillion, down from its earlier forecast ?6.44 trillion.
Toshiba, second to Intel Corp in semiconductor sales, joins rivals in Japan and abroad in cutting jobs and reducing costs amid slowing chips sales. Fujitsu Ltd, whose first-quarter losses quadrupled on lower chip prices, is cutting 16,400 workers, or about a tenth of its workforce. NEC Corp will shed 4,000 jobs.
"In this harsh business environment, Toshiba couldn't help but announce these steps," said Hideki Kamiya, who helps manage US$7.3 billion in investments at Asahi Tokyo Investment Trust Management Co. "It's a move toward reviving its earnings. But one restructuring plan isn't necessarily positive for its share price," Kamiya said. "I'll keep my eye on what else the company does."
Infineon Technologies AG, Europe's No. 2 chipmaker, said earlier today it's in talks with Toshiba about cooperating on the production of memory chips.
"We are in talks about the memory-chip business," spokesman Guenter Gaugler said in a telephone interview. Gaugler said the two companies have yet to reach an agreement. He declined to give any more details.
DRAM prices have plummeted in the past year, hovering below production costs. The benchmark 128-megabit DRAM spot price is currently at US$1.5 compared with an average of price of US$6 during the past year.
Last Tuesday, German semiconductor maker Infineon said it has entered discussions with Toshiba "for a potential partnership in the memory sector."
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