Feeds

Global slowdown bites Japan's semiconductor crowd

Revenue fell by 7.5 per cent over past year

Next gen security for virtualised datacentres

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
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?