Hitachi reorganizes

11/01/1998

Hitachi reorganizes

With pricing pressures in the DRAM sector persisting, Hitachi is shifting its emphasis. The company is undertaking a major reorganization of its chipmaking operations, breaking what is now a single division into four separate units oriented around particular product lines. The Nihon Keizai Shimbun reported that the Hitachi board has authorized a split into operations for system LSI, DRAM, system memories (e.g. flash), and general purpose products (including discretes).

Anticipating chipmaking losses of 120 billion yen ($854 million) this fiscal year, Hitachi said it will freeze capital spending in the sector at 20 billion yen ($142 million), slashing about 60 billion yen from its targeted spending plans announced earlier this year. Hitachi Ltd. has lowered its business expectations group-wide, and said it will not pay an interim dividend this year. Hitachi Group anticipates a loss of 260 billion yen for FY98, ending in March 1999. Some 4000 positions will be eliminated worldwide. The company pointed to losses in its 64-Mbit DRAM lines and slow system LSI market development as the cause of the downward revision.

Hitachi also plans to limit production of DRAMs to its joint venture in Singapore in the next few years, a move which will scale back DRAMs to account for only 10% of its semiconductor sales. By 2000, Hitachi expects system LSI operations will produce some 200 billion yen in revenues.

In one attempt to improve its competitiveness in the cut-throat DRAM market, Hitachi will make an aggressive move to 0.18-?m geometries for 64-Mbit devices at several fabs starting early in 1999. Equipment installation is currently under way at the Hitachinaka plant in Ibaraki Prefecture, and samples of the 0.18-?m, 64-Mbit parts are expected to ship before the year`s end. Volume production at Hitachinaka is expected to start early next year, and the process will also be implemented at Hitachi`s Singapore subsidiary in 1999. Use of the advanced design rules will reportedly allow the company to have a die size of less than 40 mm2, allowing 750 or more chips to be placed on one 200-mm wafer.

- P.N.D.

On the cover

Will there be critical global materials shortages due to the rising demand for semiconductor devices? The Materials Savings Subcommittee of SEMI Japan conducted an investigation and found that there are no significant supply-side limits - even if chip production increases by 10? - partly because chip production and the amount of material consumed are not necessarily in a one-to-one relationship (see article on p. S7). Illustration/collage

by Lisa Riordon.