Japan's Toshiba Corp. will likely post an operating loss in the first half and significantly downgrade full-year forecasts as its chip business rapidly deteriorates, a report said Thursday.
A global slowdown is weakening demand for Toshiba's chips used in home electronics, while a supply glut is lowering prices of flash memory chips for mobile phones and portable music players, the Nikkei business daily said.
The electrical giant expects to suffer an operating loss of some 30 billion yen (290 million dollars) in the six months through September as a global slowdown hurts demand for microchips, the newspaper said.
The loss would be a turn-around from a year-before profit of 82.5 billion yen and the first time in five years the group has posted an operating loss for a first half.
Toshiba, whose businesses include US nuclear power plant maker Westinghouse, had earlier projected an operating profit of 70 billion yen.
Toshiba in a statement would not confirm the report, saying it was still compiling earnings data.
The Nikkei, which did not identify its sources, said Toshiba would consider reducing the 367 billion yen it has earmarked for capital investment in the semiconductor segment this year.
Toshiba plunged into the red in the three months to June, blaming falling semiconductor prices and a stronger yen.
But the company kept its annual forecasts for a net profit of 130 billion yen, operating profit of 290 billion yen and revenue of 8.0 trillion yen.
The Nikkei said that Toshiba would be forced to significantly downgrade its full-year earnings projection because of poor results for the first half. The paper did not mention specific figures.
The group also suffered after giving up in February on its next-generation DVD format, clearing the way for the rival Blu-ray developed by Sony and its partners to become the industry standard.
Source: AFP Global Edition