NEC Electron Devices President Kanji Sugihara said he expects this downturn to be the worst since 1985 at a press conference announcing the company?s outlook for the rest of this year. He expects the world chip market to drop 26% in 2001, worse than 1985?s 17% drop.
While in 1985 the market for electronic systems still managed to maintain positive growth, this year’s sales of these end product systems will likely see a 5% decline as well. He expects no turnaround until the summer of 2002, bringing industry growth for the Japanese fiscal year ending March 2003 back up to around 15% to 16%, but still not reaching the levels of 2000.
NEC?s semiconductor business will bear most of the company?s $400 million (?50 billion) in capital spending cutbacks, but says it hopes to return to former levels of spending next year. NEC Electron Devices will also cut 2,000 to 2,200 contract workers, and 700 regular workers in Roseville, 600 in the UK and some 200 in Southeast Asia as it aims to cut fixed expenses by 7%.–Nikkei Microdevices