Kyocera Corp, the world's largest maker of ceramic packages to protect semiconductors, will share components and designs with its unprofitable handset unit in the US in a bid to cut costs, president Yasuo Nishiguchi said.
Kyocera Wireless Corp, formerly owned by Qualcomm Inc, will also share procurement and testing with the parent, Nishiguchi said in an interview.
The measures are part of Nishiguchi's bid to exert more control over San Diego-based Kyocera Wireless and AVX Corp, another unit in the US, in order to restore them to profit. The wireless unit has weighed on Kyocera's earnings since its purchase from Qualcomm for an undisclosed amount three years ago.
"There was clearly a need to bolster the US units," said Makoto Sakuma, who helps manage the equivalent of US$3.3 billion in assets including Kyocera shares at Asahi Life Asset Management Co.
Kyocera Wireless, which provides phones for US carrier Verizon Wireless Inc, had a loss of about ?2.7 billion (US$23 million) in the three months ended June, contributing to a 43 percent drop in Kyocera's operating profit to ?12.8 billion.
Nishiguchi has already begun to reorganize the company's US units. Tsuyoshi Mano, who joined Kyocera in 1978, this month took over as president and chief executive of Kyocera Wireless.
"The big failure was that KWC hasn't been incorporated into the Kyocera group," Nishiguchi said. "It will be from now on."
As the new management takes on the task, "there may be the need for further restructuring," which may include layoffs, he said.
Kyocera, which is also the maker of the SmartPhone and the largest Japanese producer of handsets that operate on Qualcomm's code-division multiple-access standard, last month dispatched five engineers to the unit to encourage cooperation, Nishiguchi said.
Saving costs is the aim. For example, the US unit is able to design handsets at about half of Kyocera's cost while the Japanese parent has a better quality control system, Nishiguchi said.
"I've made up my mind about the big picture," Nishiguchi said, adding that the changes, which will be announced by the end of the year, won't mirror Kyocera Wireless's reorganization.
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