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Significant losses at Japanese memory manufacturers Toshiba and Elpida for FY2008 are forcing the companies to cut costs and reduce capital spending for FY2009. DRAM manufacturer Elpida generated a loss of approximately US$508 million in the first quarter of 2008, nearly twice as much as the same period a year ago. Toshiba’s semiconductor division lost approximately US$2.8 billion in FY2008, a large part of the overall loss of approximately US$3.47 billion.

Elpida actually cut capital spending in FY2008, compared to its previous guidance. Spending was reduced to JPY86 billion from guidance of JPY95 billion. For 2009, Elpida is projecting capital spending in the range of JPY40 billion, a more than 50% cut compared to FY2008.

Elpida said it would focus capital spending on technology buys required for the migration of DRAM production from 65nm to 50nm process nodes, having been able to reuse the majority of its existing toolset for the 65nm migration. Elpida expects to have 80% of its capacity shifted to the 65nm node by June 2009. Rexchip and PSC were said to have been fully converted to the 65nm node in March 2009. Capacity utilization at Elpida was 75% in the last quarter and is expected to increase to 77% from April.

Capital spending at Toshiba’s semiconductor division has been set at approximately US$900 million for FY2009. This is down significantly from previous years of spending over US$3 billion per annum, primarily to boost NAND flash memory production.