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.
[ID:nTOE60J0AS]

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