Hitachi plans restructuring of its chip sectors

Hitachi Ltd., one of Japan’s leading electric device makers, is to lay off 3,100 staff as it restructures its semiconductor division, aiming to bring it back into profit by the next fiscal year, the company announced Friday.

The company’s three-point restructuring plan involves focusing on products that are more profitable, consolidating manufacturing by closing down some production lines and moving others, and reducing costs by layoffs and investments, a company statement said.

Firstly, the company will focus more on micro-controllers, application processors for cellular phones, and specialty memory chips for 3G (third-generation) handsets and secured multimedia cards, it said. To meet this goal, one of Hitachi’s subsidiaries in Singapore will increase its output, as will two plants in Japan.

The Singapore plant, which manufactures DRAM (dynamic random access memory) for Elpida Memory Inc., the joint venture of Hitachi and NEC Corp., will shift its production to more advanced SRAM (static random access memory), flash memory and micro-controllers next year. The company plans to slim down more of its DRAM production and lay off more people, after having cut 300 jobs in March this year.

Hitachi will cut seven fabrication lines by August 2002, leaving it with just 12, all within Japan. Five packaging and lines will also go, leaving it with eight. Some of the domestic production will be transferred to its subsidiaries in China and Malaysia, the company said.

Lastly, the company plans to cut 3,100 staff across its semiconductor sectors, including transferring workers to its other group companies, by March 2002. Hitachi estimates it will cut fixed costs by a total of 25 per cent within this fiscal year, the statement said.

Hitachi, in Tokyo, is at