Tech Industry

More Japan chip plants delayed

Matsushita will delay the start of memory chip production at one new plant and put off construction of another.

Chipmaker Matsushita Electronics will delay the start of memory chip production at one new plant and put off construction of another, as low prices continue to impact the industry.

The Japanese firm also intends to reduce capital spending to 60 billion yen (about $415.7 million) from 100 billion yen ($692.9 million) over the next four years, according to company officials cited by the Nihon Keizai Shimbun. Earlier this month, Matsushita said it will close its North American subsidiary, located in Puyallup, Washington.

Last month, Japan's biggest chipmaker, NEC, said it would slash its capital spending by $227 million in 1998. German electronics group Siemens separately said last month it will wind down production at a plant in northeast England.

Production at Matsushita's Tonami factory is being postponed until the beginning of 1999 because as 64-megabit DRAM (dynamic random access memory) chip prices continue to tumble. The new plant is slated to manufacture the PC industry's emerging standard on 8-inch wafers according to the 0.25 micron manufacturing process. 0.25 micron refers to the width of the chip's circuits.

The construction delay will last until at least 2000, Nikkei reported. By that time, the new site will manufacture chips according to the next-generation 0.18 micron process.