UPDATE 1-Tokyo Electron earnings outlook beats estimates

* Lifts outlook above consensus on chip market recovery

* Chipmakers are increasing capital spending
(Adds background, share price)

By Taiga Uranaka

TOKYO, Jan 27 (BestGrowthStock) – Japan’s Tokyo Electron (8035.T: ),
the world’s No.2 chip equipment maker, said on Wednesday it is
likely to report far smaller full-year losses than previously
expected, thanks to a recovery in the semiconductor market.

Chip companies are emerging from a prolonged slump, with
makers of dynamic random-access memory (DRAM) chips set for a
full-blown revival this year, as the improving global economy
lifts corporate demand for computers.

That has encouraged them to boost capital spending to fend
off rivals, a boon for Tokyo Electron which has received new
orders from South Korea’s Samsung Electronics (005930.KS: ) and
Taiwan’s TSMC (2330.TW: ) and UMC (2303.TW: ).

The company said it now expects to post an operating loss of
14 billion yen ($156.9 million) for the year to March 31, against
its previous forecast for a loss of 35 billion yen.

The new loss forecast is smaller than the market consensus
for an operating loss of 23.6 billion yen from a poll of 19
analysts by Thomson Reuters I/B/E/S.

Last week, the company said it would revive a project to
build a new plant in Japan, in the latest sign of the industry
pickup. [ID:nTOE60L089]

Hynix (000660.KS: ) of South Korea, the world’s No. 2 computer
memory chip maker last week forecast further recovery in the
memory chip sector on rising demand and limited supply growth.

Prior to the announcement, shares in Tokyo Electron ended
down 2.5 percent at 5,460 yen, underperforming a 0.7 percent fall
in the benchmark Nikkei average (.N225: ).
($1=89.24 Yen)

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(Editing by Edwina Gibbs)

UPDATE 1-Tokyo Electron earnings outlook beats estimates