NEC Corp. announced Tuesday it will cut 4,000 personnel in Japan and abroad by April and withdraw from DRAM chip operations in 2004 amid a global shrinkage in information-technology markets.
The chip and personal computer maker also said it will shut down its experimental semiconductor production facility in Kanagawa Prefecture, and consolidate three chip assembly plants in Fukuoka, Oita and Kumamoto prefectures into a company to be set up in Fukuoka Prefecture in October, it said.
Two assembly plants in Yamagata Prefecture will also be merged during the second half of the current fiscal year.
NEC said, however, it will expand business in broadband and mobile applications sectors by securing profit from its domestic systems-integration businesses.
“The current downturn of the IT business is like experiencing labor pains that will be followed by growth,” said NEC President Koji Nishigaki. “This is really a good time to make investments.”
By implementing restructuring strategies, NEC has targeted annual growth of 6 percent in net sales within the next three years.
As for overseas production, NEC said it will reduce by nearly half its monthly production capacity at an 8-inch fabrication line in Scotland this fiscal year, and will also reduce employees there by around 600.
NEC plans to cut 1,500 employees in its fabrication sites overseas and some 2,000 to 2,200 domestic contract workers. Some domestic employees will be relocated within NEC’s related companies, and the firm has no plans to offer early retirement.
NEC will also freeze planned investments of 20 billion yen this year to increase production capacity at Shanghai Hua Hong NEC Electronics Co.
NEC aims to cut some 50 percent of its investment in this sector for this fiscal year to 120 billion yen — 50 billion yen lower than the firm had planned earlier this year.
For the electronic devices business overall, NEC aims to reduce total fixed costs by 7 percent compared with last fiscal year, it said.
The firm meanwhile said it aims to take advantage of IT-related investment both in the public and private sectors, and also concentrate resources on areas such as optical and mobile network systems.
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