Sony, other chipmakers to boost 2001-02 spending

Reed Stevenson

TOKYO: Anticipating brisk demand for chips used in increasingly sophisticated

devices such as digital TVs and cameras, Sony Corp and other Japanese chipmakers

plan to maintain investment on plant and equipment at near-record levels next

year.

Sony, the world's second-largest maker of consumer electronics, said on

Monday its semiconductor investment is likely to exceed 100 billion yen ($885.8

million) in the business year starting in April, up from a record 95 billion yen

this year.

Separately, Matsushita Electric Industrial Co. Ltd., the world's largest

consumer electronics maker, said it will begin building a plant next year in

Japan to make chips for cellular phones, but did not say how much it would cost.

The Osaka-based giant, which produces goods under the Panasonic, National,

Technics and Quasar brands, also said it will produce chips for digital video

cameras and digital broadcast televisions from next December at a plant it is

building in Niigata, northern Japan.

Matsushita did not specify its total planned investment next year on

semiconductors. This year, its capital spending on chip production nearly

tripled to 140 billion yen.

Fujitsu Ltd. and Toshiba Corp said that they expect to maintain capital

spending at current levels. But a spokesman for NEC Corp said top executives of

the world's second-largest chipmaker after Intel had indicated that it would be

difficult to maintain the same level of investment next year.

Spending jumped this year as Japan's electronics industry shifted to making

chips for more specialized products such as cellular phones and digital video

products, for which demand is surging.

Outlook strong



That should continue next year, as Japanese manufacturers move to produce more
sophisticated chips in high demand.

Kokusai Securities analyst Hiroyuki Matsumoto said that demand for LSI

(large-scale integrated) chips would increase as they are used in products such

as digital television sets.

Charge coupled devices (CCDs), chips that act as the 'retina' of digital

videos and cameras, are also enjoying brisk demand.

And the Japan Electronics and Information Technology Industries Association (JEITA)

predicted on Friday that digital camera output in fiscal 2001-02 would rise 37.1

per cent to 418 billion yen.

That outlook has major Japanese electronics makers keen to keep investment

spending on chips at record or near-record levels.

"We are still working to draw up a budget for the next business year but

semiconductor investment is likely to exceed 100 billion yen since we are

strengthening our digital consumer electronics business," a Sony spokesman

said.

Sony's chip-related investment was estimated at a record 95 billion yen in

2000-01, up from 45 billion yen a year earlier, the spokesman said.

Analysts said Sony's capital investment figures for the current year and next

were likely to be much higher if other specialized chips for its video game

business were included.

Japan high-tech stocks rose widely on Monday in response to the Nasdaq's

steep rebound late last week.

(C) Reuters Limited 2000.