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Toshiba roils chip industry
TOKYO, Japan -- Toshiba Corp. on Tuesday sent shock waves through the chip industry on three continents, with a decision to sell a U.S. plant to Micron Technology. Toshiba said it would stop making what are known as DRAM chips. Japan's largest chipmaker also said it was taking a charge of 40 billion yen ($313.6 million) to restructure its chip business this fiscal year, which runs through March. It did not revise its forecast of a 200 billion ($1.6 billion) loss for the business year. It will again take the axe to its work force, cutting total employment by 10 percent to 29,000 worldwide by the end of March. Worldwide ramificationsThe moves shook chip companies around the world. With prices for dynamic random access memory (or DRAM) chips in a profound slump, merger talks abound in the industry. Toshiba said it is pulling out of talks with Infineon Technology of Germany. The two companies had been discussing a possible tie-up on memory chip production. That sent Infineon stock tumbling more than 3 percent in Germany, though they later recovered and were trading up. Toshiba also dealt Korean chipmaker Hynix Semiconductor a blow by agreeing to sell its Virginia DRAM plant to Micron. Micron officials have been in Seoul, eyeing a possible tie with Hynix. Micron is the world No. 2 maker of DRAM chips, while Hynix is the world No. 3. Analysts say there needs to be consolidation in the industry, which is led by Korea's Samsung Electronics. Infineon is the world No. 4. Japan's chipmakers have even been mulling a lawsuit against their Korean competitors for illegally "dumping" cheap chips in Japan. But Toshiba's chairman said earlier that such a move had to be treated carefully. Korea's chipmakers say they are just suffering through a market that saw DRAM chips fall 90 percent this year. Hynix sells offInvestors took fright that Micron might call off talks with Hynix. Hynix stock fell the daily 15 percent possible for a one-day move in Korea, to 2,080 won. But rival Samsung rose 3.99 percent to 260,500 won. Hynix says that talks with Micron are still on track. In Tokyo, Toshiba stock climbed 2 percent to 459 yen ahead of its announcements. Japan's Big Five chipmakers have been slashing employment for most of this year. But three of them announced specifics of their cuts on Tuesday. Ahead of its 10 percent job cut, Toshiba had already said its 12,000 chip workers in Japan will take temporary layoffs of a few days before year-end. Also on Monday, Mitsubishi Electric Corp. said it plans to cut 1,000 jobs and halve output at its cell phone plant in France. And Japan's No. 2 chipmaker, NEC Corp., said it would stop chip production at a plant in West Lothian, Scotland, by April 20092, laying off 1,260 workers. |
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November 5, 2001 Asian stocks gain as yen grabs focus December 18, 2001 Toshiba, Infineon double dip into chips December 12, 2001 12,000 face temporary layoffs at Toshiba November 7, 2001 RELATED SITES:
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