May 30, 2002 – Tokyo, Japan – Hitachi Ltd. has resumed one of its four semiconductor production lines at its Yamanashi plant, central Japan, after stopping the line in July due to plunging demand.

“This is because of a recovery in chip demand,” a spokesman at the Japanese electronics maker said. “Overall, the operating rate at our chip production plants is now estimated to average around 80%. The rate is expected to rise further,” he added.

Hitachi’s move comes after Toshiba Corp. restarted – in April – one of its two semiconductor production lines at its flagship memory chip production plant in Yokkaichi, central Japan. Toshiba halted the line in late September.

Hitachi has trimmed the number of its chip production lines to 14 from 19 late last year, still two more than the company’s original plan of a cut to 12 production lines, reported Dow Jones.

“Considering the market trend, we have revised (our plan). At the moment, we have no plans to further cut the production lines,” the Hitachi spokesman said.

The production line Hitachi restarted is the newest at the Yamanashi plant. Hitachi built the line to produce chips for IC cards for mobile phone handsets in the European market.

As demand for these chips is expected to remain weak, Hitachi has switched production at the line mainly to LCD driver chips. Shipments of the LCD drivers will begin this summer, probably around July, Hitachi said. The line has a production capacity of 3,000 200mm wafers/month.

Sharp Corp. also said it has decided to move forward the start up date at a new semiconductor plant in Hiroshima Prefecture, western Japan, by two months from the originally scheduled September.

The 18.7 billion yen Hiroshima plant will manufacture semiconductor lasers for optical disc drives, such as CD-R/CD-RW and DVD-ROM drives.

“The decision is based on expectations that our supply won’t be able to catch up with rising demand with our existing Nara plant and others,” a Sharp spokesman said.