Following disappointing semiconductor earnings, Hitachi Ltd has postponed construction of a new chip manufacturing facility in Japan for two years. In 1996 the company spent around $15.5m purchasing land in Yamanashi Prefecture and it is estimated that construction will cost some $850m. Hitachi had planned to start full-scale production at the new plant at the end of next year, but the delay means production won’t start until late 2001 at the earliest. In February Hitachi decided to pull the plug on its Dynamic Random Access Memory chip joint venture with Texas Instruments Inc, Twinstar (CI No 3,344) owing to a slump in DRAM prices. This in turn, resulted in the company having to lower its earnings forecast with profits anticipated to roll in at around $161,407 from the originally expected $718,263 (CI No 3,345). When the new facility does come to life, it will be built on 23,000sq meters of land adjacent to its existing Kofu factory. The new plant will make the Kofu site one of Hitachi’s primary domestic facilities for producing high density memory chips and microprocessors and should increase the value of Hitachi’s annual production to a value of $1.1bn from its current $432.8m.
