The red ink is prodigious: Toshiba $3.47 billion of net loss;
All of them are announcing job losses which could be a significant opportunity for venture capital companies in
The worst case, in a way, is Toshiba whose semiconductor division was the shining star of the company. Now it's being talked of as a candidate for divestment.
Annual semiconductor capex of $3 billion for the last three years has been cut to under $1bn after the chip business lost $2.8 billion last year following a disastrous attempt to overtake Samsung in NAND.
Stuck with nearly $20 billion of debt, a good part of which was spent on fabs, Toshiba Corporation, the parent company, is looking to raise $5bn in equity and loans.
In sheer size, the $8 billion Hitachi loss is the biggest - the biggest loss of any Japanese manufacturing company ever - and Hitachi's fourth annual loss in a row.
The company is looking for $5 billion in cost cuts.
NEC Corporation's loss of only $3bn has precipitated moves to shed 20,000 jobs. NEC's chip subsidiary, NEC Electronics had a net loss of $91.4m for FY2008 its fifth straight year of losses and said it will cut costs by an overall $1 billion this year, will cut capex by 36% to $360m this fiscal year and will cut R&D by 18% to $900m.
NEC Electronics is to merge with Renesas later this year which is engaged in its own $800 million cost-cutting exercise this year.
The two companies are No.s 1 and 2 in the microcontroller business, with a combined 30 per cent plus world market share. Such an overlap reeks of potential cost savings.
So this huge sea of red ink and cost-cutting would appear to mean one thing for
If the country is to remain a leading technology player, it may be VC-backed entrepreneurs who will have to show the way, because the big companies are cutting so close to the bone that they may lose the capacity to stay in the game.
TOMORROW MORNING: The 1995 Top Ten Semiconductor Companies
By 1995, Intel was well ahead of the pack with the success of the 386 and the soaring PC industry and the first Korean company, Samsung, had entered the top ten.
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