Hitachi Ltd. on Tuesday sharply revised its forecast for consolidated net profits for the 1997 business year from 89 billion yen to 20 billion yen.
Hitachi's revision follows a series of moves by the nation's chip makers to downsize their projections for the business year ending March 31. Like other electronics giants in Japan, Hitachi cited a sharp decline in memory prices during the current business year as well as sluggish sales of home appliances as major reasons for the shortfall in profits.
The company also said that profitability from large-scale computers is shrinking due to the price declines, citing an annual pace of about 20 percent a year.
Under the newly announced forecast, the group's total sales will be 8.43 trillion yen, down from the initial projection of 8.55 trillion yen. The group's consolidated pretax profit will shrink to 150 billion yen, down 115 billion yen from the earlier projection of 265 billion yen.
As a result, its consolidated pretax profit will drop 43 percent from the previous year, according to the firm. As for the parent company, Hitachi revised its sales projection of 4.15 trillion yen to 4.05 trillion yen, and its pretax profit forecast from 70 billion yen to 15 billion yen.
It is also expecting an operating profit of 30 billion yen for the current year. Yoshiki Yagi, senior executive managing director of Hitachi Ltd., said that the group's semiconductor business continues to remain in the red, and it will consider further restructuring in the semiconductor sector.
On Tuesday, the company announced that it will liquidate, by the end of March, Twinster Semiconductor, a U.S.-based semiconductor manufacturing venture established jointly with Texas Instruments Inc.