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Elpida, NEC Electronics report losses for 2005

Posted: 28 Apr 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Yoshiko Hara? Elpida Memory? NEC Electronics? sales? revenue?

Elpida Memory Inc. and NEC Electronics Corp. each reported a loss in 2005 but predicted they would reverse declines in 2006.

Elpida grew in sales by 34.5 percent to about $2.1 billion, but operating profit was about $900,000, down 99 percent from the previous year. Net profit dropped from $71 million to a loss of $37 million in the last fiscal year.

"The business result of fiscal 2005 was quite unsatisfactory," said Yukio Sakamoto, president and CEO of Elpida. "The yield rate of some [90nm] products did not go up as planned. We expect that the yield rate will reach the targeted level sometime in June or July."

Elpida has not disclosed its sales and profit forecasts for its current fiscal year, saying it is difficult to forecast future DRAM market conditions. Instead, the company said it expects shipments on a bit-count basis will grow by 130 percent.

For its current fiscal year, Elpida said intends to increase the ratio of 90- and combined 80- and 70nm parts in products made at its 300mm wafer lines to 85 percent and 10 percent, respectively. With about $870 million investment, Elpida plans to expand the monthly capacity of its 300mm lines to a maximum 67,000 wafers.

On the other hand, NEC Electronics reported sales for its last fiscal year ended March of $96 million, better than its earlier forecast. Still, sales were down by 8.8 percent to $5.6 billion. The operating loss was $313 million. NEC had forecast a net loss of $174 million. Taxes and other adjustments, which do not involve actual cash payments, made the final net loss grow to $854 million.

For its next fiscal year, NEC Electronics said it expects 9.1 percent growth in sales to $6 billion. It forecast that operating profit would increase to $43 million, but net profit would remain in the red by $43 million.

NEC's EMMA architecture digital image processing chips and microcontrollers will help boost sales, said Toshio Nakajima, president of NEC Electronics. "We set a target to be the top supplier of 32-bit microcontrollers this year, but we cleared the target in 2005, one year in advance, according to a survey by Gartner Dataquest," he said.

NEC plans about $870 million capex investment this fiscal year. More than half will be spent on the expansion of its 300mm wafer line at the Yamagata plant to 11,000 wafers a month. About $348 million will be used to reinforce the back-end process for discrete semiconductors.

- Yoshiko Hara
EE Times

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