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Dainippon Screen to outsource

Bloomberg

Dainippon Screen Manufacturing Co., a maker of machines that clean semiconductor wafers, plans to buy more materials overseas, including from China, to help it return to profit.

Overseas procurement of components for chip equipment will rise to about 10 percent from almost zero now, President Masahiro Hashimoto said in Kyoto.

Dainippon, forecasting its third annual loss in five years, is cutting costs through reorganizing its supply chain and reducing executive pay amid a slump in personal computer demand that has cut global chip sales. The Kyoto-based company needs to reduce costs by at least ¥10 billion to lower its break-even point as sales may remain sluggish, he said.

“We expect to see the effect fully from the second half of next fiscal year,” Hashimoto said. Dainippon is reducing the number of suppliers to boost volume and lower unit prices, he said.

Orders for semiconductor-making equipment in the quarter ending March 31 will be higher than the ¥29 billion in the third quarter, beating the manufacturer’s earlier expectation that they would be unchanged, Hashimoto said Monday.

Demand for machines used in small and midsize liquid-crystal displays and foundries “has been strong,” he said.