Fujitsu Ltd is to increase its fiscal 1999 capital investment in semiconductor production by 40% from earlier projections to 90bn yen ($783m), the company announced. This represents the first major upward revision of capital spending plans in four years by a top Japanese chip maker.
Fujitsu also plans to withdraw from producing unprofitable general-purpose DRAMs by next spring, but will continue to make function-specific memory chips such as those used in digital home appliances although production will be outsourced to a Taiwanese firm.
The company said that sales of digital audiovisual equipment and computer peripherals have been rapidly recovering since spring, necessitating additional investment to meet strong demand for flash memories and devices that use logic ICs like advanced microcontrollers.
Fujitsu will install new chip fabrication equipment at its three domestic factories and will bring in a gradual shift at its US facility from DRAM production to making flash memory and logic ICs. It expects overall production capacity for flash memories and other advanced products to increase by 40%, with the shift to higher-margin products returning its chip operations to profitability this year.
