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Japan-Update

Japan's chipmaking gear makers thrive on brisk demand

Hitachi Kokusai's April-September net profit surges 360%

Growing demand for semiconductors is buoying sales of chipmaking and testing equipment.

TOKYO -- Hitachi Kokusai Electric and other Japanese makers of semiconductor manufacturing and testing equipment are savoring robust earnings on the back of rising demand for chips used in data centers.

Hitachi Kokusai said Wednesday its net profit for the April-September half soared 360% on the year to 10.5 billion yen ($92.3 million), as its film-forming equipment for wafers fared well. The company has already upgraded its net profit projection for the full year through March to 19.9 billion yen, nearly triple on the year.

Hitachi High-Technologies, which builds testing equipment for semiconductors, upgraded its fiscal 2017 net profit projection to 39 billion yen Wednesday. The figure represents a 3% decline on the year, due in large part to heavy research and development spending in medical systems operations, but it is better than the 13% slide predicted earlier. The company's profit in the semiconductor business is seen growing 6% to 28.7 billion yen, up from the previously forecast 19.7 billion yen, down 27% on the year.

Advantest, which also makes testing equipment, is on track to a 38% jump in second-half net profit to 9.5 billion yen. The company has cut its full-year net profit projection due to a drop-off in testing-equipment sales to Chinese smartphone makers in the first fiscal half. But the business environment is "nothing but sound," President Yoshiaki Yoshida said. The company has upgraded its order forecast for the year to 188 billion yen from 175 billion yen.

Advantest will increase its annual dividend by 1 yen on the year to 26 yen per share. Hitachi High-Technologies has upgraded its annual dividend forecast by 5 yen from earlier plans to 80 yen, same as the previous year. Meanwhile, Hitachi Kokusai is expected to pay no annual dividend. It paid 26 yen per share in annual dividend for the previous year.

How long the demand for semiconductors will continue growing is the big question going forward. Shunichi Uno, chief financial officer of Hitachi High-Technologies, expects memory chips to continue faring well for a while. On the other hand, some are sounding a note of caution in light of a recent drop in equipment order value from Taiwan Semiconductor Manufacturing Co.

(Nikkei)

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