Fujitsu Ltd. Friday announced it is taking a $2.45 billion special charge, largely to scale down its semiconductor operations, which is expected to result in a $1.6 billion net loss in the current fiscal year ending next March 31.
The firm reported a $444 million operating loss in its first fiscal quarter of this year (three months ended June 30, 2001) on sales of $8.7 billion. First quarter sales were 2% above the same quarter of 2000.
A second Japanese electronics giant, NEC Corp., reported that its first fiscal quarter ended June 30 was barely in the black with $6.5 million net profits on sales of $9 billion. NEC earnings were down 73% from $24.5 million in the same period of 2000, while sales were up 6%.
Both companies blamed the global IT market slump and crashing semiconductor prices for the profit dive. NEC said its Electron Devices group had a $122 million operating loss on a 28% drop in sales in the first quarter. Fujitsu said plunging prices in flash memory, SAW filters and logic ICs were a major factor in its first quarter loss.
Both Fujitsu and NEC announced further semiconductor restructuring to stem the losses. Without spelling out any details, Fujitsu officials said the $2.45 billion special charge covers a broad shakeup in its semiconductor operations, including the closing and sale of some unidentified fabs. The firm said a further announcement of the chip restructuring will be made in a month.
NEC said it is spinning off its optical and microwave devices business in October into a new subsidiary to be called NEC Compound Semiconductor Devices Ltd. Officials said setting up the operation as a separate company would concentrate resources and lead to more efficient management. Some analysts speculated that the group was being spun off as a prelude to selling it off.