Struggling Japanese microchip maker NEC Electronics said it expected a bigger loss in the current business year on slow chip sales.
NEC Corp., a Japanese electronics conglomerate holding a 70 percent
stake in NEC Electronics, also cut its operating profit forecast by
15 percent on Thursday, hit by the chip unit's sluggish
NEC Electronics said it would close old production lines, slash
outsourcing costs and salaries to cut fixed costs by 20 billion yen
and move into the black next year.
The company would withdraw from application-specific chips with low
profit yield and cut development costs for chips that run
applications like Web sites on mobile phones, it said.
It would instead focus on chips to run cars and graphic processing
chips used in products like cameras, games and flat TVs, it said.
The company will reduce the number of production lines it has in
Japan to four lines from nine by an unspecified date and shift
production for low-end chips overseas to its plants in China,
Malaysia, Singapore and Indonesia, executives said.
But it said it does not now have concrete plans to close factories
for cutting edge front-end processes or cut staff for the next
NEC now expects an operating profit of 85 billion yen for the year
to March, down from a previous forecast of 100 billion yen.