Toshiba Corp, the second-biggest chipmaker, had a wider-than-expected loss in the first half as chip prices slumped. The stock fell 4.7 percent as the company almost doubled its full-year loss forecast.
Toshiba had a group loss of ?123 billion (US$1 billion), or ?38.25 a share, in the six months to Sept. 30, from a profit of ?53.9 billion, or
?16.74, a year earlier. The Tokyo-based company forecast a ?200 billion loss in the full year, up from its earlier forecast of ?115 billion. The chip division will account for three quarters of that loss.
Toshiba is reeling from a decline in DRAM chip prices that left rival Korea's Hynix Semiconductor Inc struggling to rearrange debts and drove smaller Taiwanese companies out of the business. Toshiba decided to accelerate its job cuts and scale back investment today, after spot market DRAM prices plunged 79 percent this year.
Japanese chipmakers "have lost their competitiveness in the general-purpose DRAM market," said Sadaji Shibata, general manager at Daiwa Asset Management Co, which handles US$66 billion in securities.
"Investors will focus on how much profit chipmakers like Toshiba can make in areas of the chip industry where they're strong, such as the customized chip business."
Toshiba shares fell ?25 to ?510, although they only lost about ?10 of that after the earnings were announced.
The company's semiconductor division is forecast to lose ?150 billion for the full year. The division will shed 3,000 jobs by next year, two years earlier than planned, and will cut this year's planned investment to ?50 billion from ?75 billion.
For the first half, Toshiba's sales fell 11 percent to ?2.5 trillion from ?2.8 trillion. DRAM prices fell to US$1.17 in the past 10 months, below the cost of production.
Adding to Toshiba's woes, the World Semiconductor Trade Statistics industry group earlier this week said global semiconductor sales are expected to fall 32 percent this year because of lower chip prices resulting from sluggish sales of personal computers.
DRAM sales will probably plunge 61 percent to US$11.3 billion this year from US$28.8 billion last year, the group said. Revenue will rise to US$18.7 billion in 2004, up 65 percent from 2001.
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