Fujitsu Ltd, Japan’s biggest computer-services provider, said profit at its semiconductor business will probably be ¥10 billion (US$107 million) in the 12 months to March 31, 2011, rebounding from a ¥15 billion loss this fiscal year.
The Tokyo-based company aims to cut costs at the business by ¥80 billion over two years to March 2011, it said in a statement yesterday. Fujitsu will jointly develop 28 nanometer chips with Taiwan Semiconductor Manufacturing Co (TSMC) and outsource production to the Hsinchu-based company.
Fujitsu president Kuniaki Nozoe is selling the company’s money-losing hard-disk-drive business to Toshiba Corp and outsourcing some chip production to TSMC to cut costs and return to profit. A lower spending burden and cost reductions will help make the chip operations profitable next fiscal year, the company said in April.
“It’s becoming increasingly unfeasible for companies in the chip industry to shoulder capital expenditures alone, making partnerships an essential way to improve efficiency,” Haruki Okada, who heads the chip business at Fujitsu, said at a briefing in Tokyo yesterday. “Chip demand has passed its lowest point and has been in recovery since February.”
Fujitsu declined 2.9 percent to ¥631 on the Tokyo Stock Exchange yesterday afternoon. The benchmark Nikkei 225 Stock Average fell 1.6 percent.
The company aims to achieve a record ¥15 billion operating profit at the semiconductor unit in the 12 months ending March 2012, it said.
Fujitsu’s net income will probably reach ¥95 billion in the year ending next March, compared with a ¥112.4 billion loss a year earlier, the company said last week. The outlook includes ¥89 billion from the sale of 12 million Fanuc Ltd shares, Fujitsu said at the time.
The loss at Fujitsu’s chip business, which comprises order-made devices and semiconductors used in flat-panel televisions, mobile phones and servers, will narrow to ¥15 billion this fiscal year from ¥60 billion in the previous 12 months, the company said in April.
A nanometer is one-billionth of a meter and measures the width of transistors in a chip, where a smaller gap means more transistors can be packed on each wafer.
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