Oki to sell chipmaking business

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Oki Electric Industry Co will sell its sluggish semiconductor operations, it was learned on Wednesday. Oki is in talks with Rohm Co, a mid-size chipmaker based in Kyoto, over possible sale of the business, informed sources said.

For fiscal 2007 that ended in March, Oki’s chip division, which ranks 13th in Japan, earned an operating profit of 3.8 billion yen on sales of 138.2 billion yen. On a consolidated basis, Oki incurred a recurring loss for the second straight year.

For the year, Rohm saw its group operating profit fall 3.1% from the previous year to 67.3 billion yen on sales of 373.4 billion yen, down 5.5%, due to the yen’s appreciation and a U.S. economic slowdown.

Rohm, which has so far benefited from robust demand for chips for flat-panel television sets, game machines and mobile phones, faces a fall in profitability as product prices drop amid fierce competition.