Feeds

Global slowdown bites Japan's semiconductor crowd

Revenue fell by 7.5 per cent over past year

Internet Security Threat Report 2014

There was more bad news for Japan’s beleaguered semiconductor industry on Thursday as it emerged the country’s big name chip suppliers were hit hard by a global slow down in the second quarter which saw worldwide sales plunge by over $2bn from the previous year, according to analysts.

Bean counters at IHS iSuppli said global semiconductor market revenue fell by three per cent from $77.5bn (£48.9bn) in Q2 2011 to $77.2bn (£48.7bn)in the last quarter, stats which could portend a gloomy outlook for the rest of the year.

The continuing Eurozone crisis, high unemployment in the US and slowing manufacturing growth in China were blamed for the disappointing stats.

Although companies in all major regions saw revenues fall, Europe and Japan fought it out for the wooden spoon. Revenue for European suppliers fell by 8.3 per cent year-on-year while Japan was not far behind with a 7.5 per cent decline.

Although half of Japan’s semi specialists did not see a fall in revenue, there were sizeable losses for market leaders Toshiba, Renesas, Fujitsu Semiconductor and Mitsubishi which iSuppli said magnified the country’s poor performance.

Toshiba, for example, saw a 14.5 per cent decline over the year from $2.78bn to $2.38bn.

IHS analyst Dale Ford was pretty upbeat about the short-term prospects for Japan’s semiconductor industry, claiming that local firms typically see a rebound in revenues in the quarter ending September.

However, longer term the signs are not looking so good for the country’s once proud semis, with advanced manufacturing technologies shifting to other countries such as Taiwan and South Korea, he told The Reg.

"The costs of manufacturing in Japan have not remained competitive with other areas and the required investments in the latest manufacturing technologies have not kept pace with other countries," he added.

"Also, the Japanese semiconductor suppliers are tightly aligned with Japanese OEMs. As major Japanese OEMs have lost market share in the world market this has also hurt the chip suppliers to these companies, heavily oriented to Japanese chip suppliers."

Ailing Renesas is reported to be undergoing a radical restructuring which will see the outsourcing of 40nm and 90nm chip production to Taiwan Semiconductor Manufacturing Company and potentially up to 12,000 job losses.

Toshiba, meanwhile, announced last November that it was shutting three of its six plants in Japan to cut costs in the face of falling demand.

In a previous report, iSuppli revealed that the share of global semiconductor revenue held by suppliers headquartered in Japan has dropped from an impressive 27 per cent in 2003 to less than 19 per cent last year.

The analyst argued that Japan’s chip firms need to invest heavily in new facilities in order to make the transition to 28nm production or risk facing irrelevance on the world stage. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.