Falling chip prices have made a significant impact on the year-end profits of three Japanese manufacturers.
Net profits at Toshiba, Fujitsu and Mitsubishi fell by 26%, 27% and 86% respectively last year.
Toshiba's net profits for the year ended 31 March 1997 dropped to 67 billion yen (#354 million) from 84 billion yen last year. This was despite a 6.5% rise in sales to 5.4 trillion yen.
A spokesman for Toshiba confirmed profits were hurt by lower semiconductor prices. He explained that the cost of sales, promotion and administration had increased at a faster pace than sales.
Net profits at Fujitsu fell to 46 billion yen, from 63 billion yen in 1996. Sales were virtually stagnant at 3.7 trillion yen, from 3.2 trillion yen the year before. The company said it managed to lower the impact of the drop in semiconductor prices with strong sales in other divisions.
For example, sales at the company's group communications equipment business grew by 37% to 855 billion yen, largely due to high demand for mobile phone equipment.
Mitsubishi, whose profitability suffered the most, reported net profits of 8.52 billion yen compared to 15.8 billion yen one year ago. According to analysts, the company was hit by a double whammy of a drop in semiconductor prices and loss of sales in its consumer electronics division. The company wrote off 5 billion yen last year following losses at Mitsubishi Electric America.
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