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October 26, 1995

BOOMING CELLULAR PHONES, DEMAND FOR CHIPS LEAVES FUJITSU SITTING PRETTY

By CBR Staff Writer

The yen is back up to one American cent (how does a modern economy function with such an absurdly tiny unit value for its currency?) and chip and telecommunications equipment sales are booming to such an extent that almost everything in the Fujitsu Ltd garden is lovely – and hey, even if the yen only stays where it is, and does not go back to 1.18 cents as it was earlier this year, Fujitsu will end the year just about level pegging with Hewlett-Packard Co so that the two of them added together will be about the same size as IBM Corp. Only a decade or so ago, the world’s second biggest computer company was still a tenth the size of IBM.Profits at Fujitsu soared 440% for the first half of the current fiscal year, and IBM should be kicking itself that it did not get into the merchant memory chip market back in the late 1980s, and that it never thought of turning over some of those shuttered factories to making cellular phones, because those are the two product lines that have done so much to restore the smile to Fujitsu’s face. If IBM had diversified the typewriter, keyboards and low-end printer business into cellular phones instead of spinning it off, it would now be moving into all the factories the mainframe makers are vacating. Fujitsu expects sales of semiconductors and communications equipment to remain robust throughout the second half, boosting group profits to the highest ever level for the full fiscal year to March 31. In the first six months, Fujitsu’s semiconductor sales rose 13.5% to $2,100m, and demand for dynamic and Flash memory chips was especially strong, it said. Fujitsu plans to expand capital spending on semiconductors this fiscal to $1,900m from $1,100m last year. Sales of communications equipment rose 17.5% to $2,730m. For the full year Fujitsu estimates its group net at $900m.

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