Feeds

Global slowdown bites Japan's semiconductor crowd

Revenue fell by 7.5 per cent over past year

Security for virtualized 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. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.