JAPAN TO CUT MICROCHIP OUTPUT, BOOST IMPORTS

  Leading domestic semiconductor makers
  will boost imports and cut production of key memory microchips
  from next month in line with government attempts to ward off
  U.S. Trade sanctions, company spokesmen said.
      The moves might persuade the U.S. To call off the
  sanctions, despite obstacles to full implementation of the
  plans, analysts said.
      The tariffs will affect about 300 mln dlrs worth of
  products and are in retaliation for Japan's alleged failure to
  honour a semiconductor trade pact.
      In announcing the sanctions last Friday, President Reagan
  said Japan had not fulfilled its promise to halt predatory
  pricing and open Japan's market to foreign products.
      But U.S. Trade representative Clayton Yeutter said
  yesterday on U.S. Television that the U.S. Is willing to drop
  the tariffs if Japan shows a "clear indication" that it will open
  its markets to U.S. Goods.
      The Ministry of International Trade and Industry (MITI) has
  urged producers to slash output of the chips by 11 pct in the
  second quarter, following a call to reduce production by more
  than 20 pct the previous quarter.
      MITI also urged makers to boost chip imports.
      Analysts said the moves could encourage Washington to
  cancel the tariffs ahead of next month's meeting between Prime
  Minister Yasuhiro Nakasone and President Reagan.
      "The U.S. Wants to be satisfied. It has rattled its sword
  and shown that it can and will do business," said analyst Nick
  Edwards at Jardine Fleming Securities Ltd in Tokyo.
      But analysts cautioned that although Japanese producers can
  cut output, boosting imports -- the key to U.S. Withdrawal of
  the sanctions -- is more difficult.
      "The U.S. Does not have the low-end consumer IC's
  (integrated circuits) that the Japanese need for consumer
  products. They're well supplied here," said Richard May, senior
  analyst at Barclays de Zoete Wedd Ltd in Tokyo.
      The U.S. Leads in production of medium and high-end IC's,
  but Japanese makers are keen to develop their own high-end
  production skills, the analysts said.
      "The Japanese must be prepared to trade some losses on
  semiconductors in return for free access to other areas," said
  Edwards.
      A spokesman for Hitachi Ltd &lt;HIT.T>, said the firm's
  reduced output of 256 kilobit dynamic random access memory
  (256K DRAM) was unrelated to MITI's efforts to ward off the
  trade sanctions. Decreased production was a natural result of
  the company increasing output of one-mln bit DRAM's, he said.
      Company officials unveiled the following plans -
      - NEC Corp &lt;NESI.T>, Japan's largest chipmaker, plans to
  slash production of 256K DRAM semiconductors by 29.41 pct to
  six mln per month from a monthly average of 8.5 mln last
  quarter.
       In the year beginning April 1, NEC will boost chip
  imports, which comprised some 20 pct of all NEC chip
  consumption the year before.
      - Hitachi Ltd's &lt;HIT.T> April output of 256K DRAM's will
  fall by 25.93 pct to four mln compared to 5.4 mln in March. The
  company is trying to boost imports but has not set a specific
  target. Imports are currently very low.
      - Toshiba Corp &lt;TSBA.T> will reduce April 256K DRAM
  production by 16.67 pct to just over four mln and is
  considering ways to boost imports, a company official said.
      Toshiba has an agreement with Motorola Inc (MOT.N) to sell
  the U.S. Firm's chips in Japan. The firms are planning a
  joint-venture production of memory chips in Sendai, northern
  Japan.
      - Mitsubishi Electric Corp (MIET.T) will trim second
  quarter output by about 10 pct to between 5.5 mln to 5.6 mln
  chips compared to the first quarter. Plans call for increased
  imports but an official said "boosting imports will be difficult
  as it depends on sales demand."
      - Fujitsu Ltd (ITSU.T) will cut production in accord with
  MITI guidelines and boost imports from currently low levels.
      - Oki Electric Industry Co Ltd (OKIE.T) will reduce April
  production by 10 pct from March's 3.2 mln. Oki is studying ways
  to increase imports by 10 pct in the fiscal year beginning
  April 1 from the previous year's total of more than five
  billion yen, a company official said.
  

