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Cellular surplus hampers Hitachi Cable

The Japanese epiwafer supplier suffers from weakness in the high-frequency device market, but is sustained by lasers and LEDs.

Hitachi Cable's first fiscal quarter 2008 GaAs epiwafer sales have slumped below the previous year's levels, as weak demand filters down from parts of the handset market.

“Sales of compound semiconductors fell from the first quarter of the previous fiscal year, as sales for use in high-frequency devices were sluggish,” the company said in its quarterly report.

A spokesperson for the wafer manufacturer said this fall was caused by excess inventory in the cellular business and that Hitachi Cable expected sales to rebound in the second half of the year.

GaAs power amplifier makers TriQuint and RFMD have also suffered from excess inventory recently as a result of a downturn in business at Motorola. TriQuint in particular had to write off $3 million of stock relating to a single customer, presumably Motorola.

In total, Hitachi Cable s sales of compound semiconductors for the quarter, which ended June 30, came to Â¥3.5 billion ($30.3 million), deriving primarily from GaAs epiwafers grown on diced and polished single crystals.

Sales of GaN wafers are yet to make a significant contribution to this total, and the company is not yet producing its ground-breaking 3-inch GaN substrates in production quantities.

Its sales are divided roughly into thirds between LED making customers, laser firms and companies producing other devices, including high-frequency electronics.

The Japanese company's revenues are dominated by sales to its domestic market. However, Japanese power-amplifier manufacturers have dropped out of the current industry top 10 list, which could worsen Hitachi Cable s high-frequency revenue gap problems even further.

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