Japanese tech firm trouble continues

Demand is still mixed for Japanese semi-conductors

Japan's biggest computer maker Fujitsu has cut 9,000 jobs and warned that it will continue to make losses.

The communications equipment market has once more fallen into a slump and domestic IT spending will likely be restrained until the end of the business year,

Fujitsu

There was more grim news from other electronic and tech companies with Sanyo, Sharp and Mitsubishi Electronic warning of weak demand continuing restructuring costs.

The US is Japan's largest export market, but US demand for Japanese IT goods has been weak.

Cheap imports into Japan have hurt the companies' profit margins in their own country.

But there were some bright spots, including continuing overseas demand for consumer electronics products and a rebound in orders for semiconductors.

Fujitsu jobs

Fujitsu said the continuing tech sector slump was the reason for the job cuts and a big loss in the second three months of the financial year.

"The communications equipment market has once more fallen into a slump and domestic IT spending will likely be restrained until the end of the business year," Fujitsu chief financial officer Takashi Takaya said.

The company has already cut 22,000 jobs in the last two years.

Fujitsu, also Japan's fifth-largest chipmaker, reported a net loss for the quarter ending September of 91bn yen (£472m; $736.5m), compared with a loss of 119bn yen last year. It said it expected a total loss for the year of 110bn yen.

Fujitsu's shares ended higher, rising 3.5% to 443 yen, after the results.

Earlier this month the shares fell to 410 yen, the lowest level in almost two decades.

Some profits

Mitsubishi Electric, Japan's fourth-largest chipmaker and a major manufacturer of industrial equipment, reported better-than-expected operating profit of 15.5bn yen, three times last year's level, but net profit fell to 5.9bn yen, down 53.6%.

"Information technology-related demand has ... been weak, particularly for telecommunication infrastructure (and) personal computers," Mitsubishi said in a statement.

The company stayed in the black by "reducing the assets base and cutting fixed costs" and it kept profit forecasts unchanged for the full year.

Shares ended 5.9% higher at 323 yen.

Sharp, Japan's largest maker of liquid crystal displays (LCDs), reported strong growth in the first half of the year because of strong demand for its mobile phone handsets and television monitors.

Net profit for the six months to September at Japan's third-largest mobile phone maker rose 40.5% from a year earlier to 22.9bn yen, as sales increased 7.8%, in line with estimates.

Shares in Sharp ended up 1.14% at 1,069 yen.

Sanyo hurts

In contrast, another major consumer electronics producer, Sanyo Electric, reported steep fall in half-year net profit due to restructuring charges.

Net profit totalled 2.46bn yen in the six months to September, down 61.5% from a year earlier.

But strong sales of audiovisual and electronic equipment pushed operating profit up by 3.6% to 33.6bn yen.

The results were slightly higher than expected but Sanyo cut its full year profit forecast to 8bn yen from 25bn due to weak sales of home appliances.

Sanyo shares closed unchanged at 361 yen.