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Japan's semiconductor trading houses race to shrink overheads

Friday 03rd July, 02:17 PM JST

TOKYO —

Japan’s leading semiconductor trading firms are racing to lower their marketing and administrative costs in order to wring out more profits amid stagnant demand and shrinking revenues in the year through March 2010. The global recession has cooled demand for semiconductors and kept the secondary market in a slump.

Foreign chip trading companies such as Avnet Inc. are broadening their reach and ratcheting up the competition. And as chipmakers reorganize, typified by next April’s planned merger between NEC Electronics Corp. and Renesas Technology Corp., semiconductor traders also face more streamlined sales routes. Against this backdrop, the various trading firms are rushing to slash their administrative costs. The effort is particularly apparent among those that count on NEC Electronics for much of their business. Ryosan Co. is reducing such costs by 14 percent to 11.5 billion yen (US$120.71 million) by controlling personnel expenses and by merging and closing bases.

JCN

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