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Japan's electronics firms cut forecasts

The largest Japanese electronics companies are lowering earnings forecasts amid tepid demand and currency fluctuations.

The largest Japanese electronics companies are lowering earnings forecasts in the midst of tepid demand and currency fluctuations.

The top five Japanese companies who's divisions manufacture and sell semiconductors, computers, and other electronics and telecommunications devices, announced lower earnings forecasts yesterday.

Hitachi, Fujitsu, Toshiba, NEC, and Mitsubishi said the lower earnings are for the fiscal year ending this month.

The revisions have resulted from depressed domestic demand and the yen's rise against the dollar. Some companies are also citing higher costs because of restructuring, according to business daily Nihon Keizai Shimbun, as well as softening demand in the telecommunications industry, declining chip sales, and weakness in various PC-related devices.

NEC, in particular, is in the throes of an unprecedented restructuring. So is Hitachi, which recently announced a shakeup of its U.S. computer operations.

Fujitsu and Toshiba have undergone restructuring too. It was reported today that Fujitsu is subcontracting the manufacture of liquid crystal displays (LCDs) to a Taiwanese manufacturer in a cost-cutting move. Japanese companies typically keep manufacture of critical components such as LCDs in-house or consign production to another domestic manufacturer.

Hitachi, NEC, Toshiba, and Mitsubishi project losses in their computer and semiconductor operations, while Fujitsu forecasts a decrease in profits. Hitachi said it will report a 375 billion-yen loss, a decline of 8 percent, while Toshiba expects a 2 percent loss of 17 billion yen.