Toshiba Corp issued a revised trading forecast on Friday, saying that declining price of PC components and certain semiconductor chips would drive it into a group net loss of $190m (25bn yen) for the first six months through September. Previously, Toshiba had expected to make profits of $76m (10bn yen). Additionally, the company said it now planned to lay off up to 6,500 employees by March 2000 with the first 2,500 set to leave before the end of this financial year. At the end of March 1998, Toshiba employed 66,500 staff. The news follows a similarly bleak forecast a week earlier from Hitachi Ltd, which said it will cut 4,000 of its 66,000 staff and which downgraded its forecast to an expected $760m loss. Toshiba said the biggest problems stemmed from the price of its 64-megabit dynamic random access (DRAM) memory chips which had fallen faster than it had expected and had dragged down the prices of other semiconductors, including flash memory. Last month, Toshiba reduced production of DRAM chips in favor of what it said were higher margin flash memory and other chips. DRAM production accounted for 80% of Toshiba’s total chip output in 1997 but the company is aiming to reduce this total to 50% by 2000. Adding to the DRAM troubles, the company said it had experienced poor demand and price declines in its color display tubes and liquid crystal display panel business. For the full year, Toshiba forecasts that it will return to breakeven as business improves but it downgraded its expected revenues by $380m to a total of $42bn.
