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Sanyo downgrades forecast after steep loss

Posted: 22 Nov 2005 ?? ?Print Version ?Bookmark and Share

Keywords:sanyo? tft lcd? dram? display?

Sanyo has reported a huge loss in the first half of its fiscal year and has reduced its full year guidance, projecting a loss reaching 10 percent of its estimated sales.

In the first half, Sanyo recorded sales of %1,187 billion ($9.97 billion) with an operating loss of %27 billion ($227 million), compared to profit of %39 billion ($328 million) year before. The net loss was %143 billion ($1.2 billion).

For the full fiscal year, the company expects sales to fall 1.8 percent to %2,440 billion ($20.5 billion), with a net loss of %233 billion ($1.95 billion).

"The business is not expected to go worse but we revised the forecast downward to proceed restructuring and we severely re-evaluated our assets," said Toshio Iue, president of Sanyo.

Sanyo's three-year business plan calls for drastic shrinkage in consumer electronics, semiconductors and home appliances and concentrate on power solutions, business use equipment, and personal mobile business. The company expects to recover sharply to be in the black next year.

Under the restructuring plan, Sanyo intends to shut down production of non-profitable products such as DRAM, flash, TFT LCD drivers, some microprocessors and audio ICs, and focus on more profitable analog TV LSIs and audio chips and PDP drivers.

Sanyo's main semiconductor fab was heavily damaged by the October 2004 earthquake. In the reconstruction process, Sanyo reduced the number of fab lines from five to two.

Eventually, Sanyo expects to spin out its semiconductor business, say industry observers.

- Yoshiko Hara

EE Times

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