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Major Japanese Electronics Firms to Leave Semiconductor Business - 2001-12-21

Two of Japan's major electronics firms have unveiled plans to pull out from the semiconductor business. Meanwhile, the country's top two automakers forecast strong sales next year.

Toshiba, the world's second largest semi-conductor company, says it plans to stop making low-end memory chips. The move comes amid the global sluggish climate in the technology field.

Tadashi Okamura is president of Toshiba. He told reporters that the business has become unprofitable. He said the company could not make a profit, even though it has advanced technology. So he says Toshiba decided to withdraw from this business because of the pattern of price competition.

The company says it will sell to Micron Technologies its semi-conductor plant in the U.S. state of Virginia.

Another electronics giant, NEC, will shut its semi-conductor factory in Scotland in April next year. The firm will slash more than 1,200 jobs there. The measure comes as part of its global restructuring plan, amid faltering demand for semi-conductors made at the Scottish subsidiary.

There's brighter news from Japan's Number 1 and 2 automakers. They are predicting robust sales next year, both in the domestic market and abroad. Toyota expects to sell more than 5 million units worldwide in 2002, a one percent gain over this year's sales.

Toyota President Fujio Cho explained the firm's strategy. He said the company will aggressively launch new car models next year, and try to spur consumption to contribute to turning the Japanese economy around.

And Honda said it sees a 6 percent rise in sales next year, and aims to post global sales of nearly 3 million vehicles. The company will begin producing small cars in Thailand from next year and export them back to Japan, in a move to reduce production costs.