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Fujitsu streamlines fab operations

Posted: 03 Feb 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Fujitsu fab? manufacturing facility? wafer fab?

Fujitsu Ltd has consolidated its fabs amid losses in its chip unit. The company will consolidate three six-inch wafer manufacturing lines into one line and four 8-inch wafer lines will be consolidated into three.

Approximately 2,000 employees affected by the reorganization will be reassigned within the Fujitsu Group. In Q4 of fiscal 2008 ending March 2009, the company expects to recognize a loss of approximately 10 billion yen ($111.2 million) related to facilities and equipment.

"With the rapid worsening of economic conditions worldwide, orders have decreased significantly since October 2008," according to Fujitsu. "The company has therefore deemed it necessary to reorganize and consolidate its LSI wafer manufacturing facilities."

The parent company said net sales in the nine-month period totaled 3.5 trillion yen ($38.546 billion), a decline of 7.9 percent compared to the same period in fiscal 2007. The company reported a net loss of 36.1 billion yen ($397 million) for the nine-month period, compared with a net loss of 3.8 billion yen ($42.3 million) in the same period of fiscal 2007, due to one-time charges and higher non-operating losses.

Net sales in its device solutions unit for the first nine months were 490.4 billion yen ($5.39 billion), a decrease of 18.4 percent compared to the first nine months of fiscal 2007. The segment posted an operating loss of 28.4 billion yen ($313 million) for the first nine months of fiscal 2008 as a result of the impact of lower sales and capacity utilization rates.

In the quarter, the devices solutions unit said sales were 91.9 billion yen ($1.01 billion), down 30.8 percent from the like period a year ago. The operating loss in the group was 21.1 billion yen ($234.6 million) in the quarter, compared to a profit of 9.4 billion yen ($104.5 million) a year ago.

Sales for LSI devices fell 25.4 percent in the quarter. "Although sales of 65nm logic devices increased, sales of 90nm logic devices and standard logic devices declined. Demand is becoming increasingly weak, with sales declines of 13.5 percent, 22.4 percent and 30.8 percent recorded in the first, second and third quarters, respectively," according to Fujitsu.

"Our business operations remained profitable despite a harsh economic climate," said Fujitsu president Kuniaki Nozoe, in a statement. "We've proven that we can consistently generate profits in the IT services business, but overall we're not satisfied with the results. I'm confident that the measures we take in the coming months will put us in a better position to grow once the global economy turns the corner."

Fujitsu's projection for full-year net sales has been lowered by 350 billion yen (3.9 billion) to 4.7 trillion yen ($52.3 billion). The company now projects a full-year net loss of 20 billion yen ($222.4 million).

Rough spell
It has been a rough time for Fujitsu and other chipmakers in Japan. Fujitsu is said to be looking for a buyer for its chip unit, according to reports.

Last year, Fujitsu formally moved to split off its chip unit into a new subsidiary. The parent company will still own 100 percent of the chip unit's shares. It's unclear if the parent company will sell all or part of the chip unit's shares in the future.

Continuing its restructuring efforts, Fujitsu late last year sold its shares of compound semiconductor supplier Eudyna Devices Inc. to Sumitomo Electric Industries Ltd. All shares of Eudyna owned by Fujitsu, which is about 29.68 million shares, will be acquired by Sumitomo Electric.

Others are also in trouble. Toshiba Corp. and NEC Corp. are in talks to merge part of their chip operations. Both companies are also shutting or delaying fabs.

Hit hard by the IC downturn, Japan's Toshiba Corp. outlined several cost-cutting moves, including plans to delay two NAND flash fabs. The company also reduced its capital spending and will cut 4,500 temporary workers.

For the same reasons, Japanese chipmaker Renesas Technology Corp. has replaced its top executive amid losses, layoffs and plans to shutter older fabs.

- Mark LaPedus
EE Times

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