Mitsubishi chip unit to shed jobs as demand slumps

Japanese electronics conglomerate Mitsubishi Electric Corp has said that its chip division, hit by the semiconductor industry…

Japanese electronics conglomerate Mitsubishi Electric Corp has said that its chip division, hit by the semiconductor industry's worst slump ever, will cut 2,000 jobs and shut three production lines in Japan.

The company was the last of Japan's five big chipmakers to announce job cuts and restructuring steps in response to a broad, deep slump in the electronics sector that may be prolonged by last week's deadly attacks in the United States.

Mitsubishi Electric said last week that it would trim 1,000 contract employees from its workforce in the business year to next March and it forecast a 20 billion yen ($170.5 million) consolidated pretax loss for 2001/02.

The chipmaker expanded on its plans today, saying it would lay off an additional 1,000 contract workers from the chip division by March 2003.

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It said it would also boost the operating rate at its semiconductor plants above 80 per cent from the current 60 percent by shutting three lines at the start of next year.

The overall direction of the IT and IT-related businesses has not changed much, but in the short term things are working against us, President Ichiro Taniguchi told a news conference.

Mitsubishi also said it was considering a tie-up with another handset manufacturer, although it declined to give any details.