Toshiba, Japan's second largest electronics group, has warned it would incur its first loss in 48 years, fuelling concern about the devastating impact of the collapse of the semiconductor market on Japan's electronics industry.
The warning comes days after Hitachi forecast its first losses in more than 50 years. Shares in Toshiba slid 7 per cent from 470 yen to 437 yen, their lowest level since July 1986, before the group's announcement that it expected parent net losses of 5 billion yen (£25 million) in the first half of the current financial year.
The group blamed the rapid decline in the price of memory chips and computer accessories as the main reason for the loss. It expected to break even at the fullyear stage, with computer accessory prices stabilising and strong sales of computers lifting the second-half result.
The group also unveiled a wide restructuring that will consolidate departments to raise efficiency. Employee levels will be cut 10 per cent to 60,000 by March, 2000.
Toshiba also slashed its capital spending on semiconductors from 140 billion yen to 120 billion yen this year. However, it has no plans to close its chip factories in Japan or overseas, said Mr Taizo Nishimuro, company president. A number of Japanese chipmakers, including NEC, Fujitsu, and Matsushita Electric, have announced plant closures in recent weeks.
In May, Toshiba had forecast profits of 7 billion yen in the six months ending in September, compared with 22.4 billion yen in the same period last year. On a consolidated basis, the group expects half-year losses of 25 billion yen after taxes on 2,550 billion yen in turnover.
Last year, the group's only lossmaking division was home appliances. This year Toshiba also expects operating losses of 30 billion yen to 40 billion yen in its electronic devices division.
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